ANNUAL
REVIEW
2020

Coca-Cola Bottlers Japan Holdings Inc.
Tokyo Midtown Tower, 9-7-1 Akasaka, Minato-ku, Tokyo 107-6211, Japan

Coca-Cola Bottlers Japan Holdings Inc.

Corporate Philosophy

Leaders' Perspective : Our Value Creation Story

Contents
Leaders' Perspective:
Our Value Creation Story
02

Top Message

03

Message from the CFO

06

Board of Directors

08

Corporate Philosophy

Corporate Philosophy

Topics: Highlights of 2020 and the First Half of 2021 09

Coca-Cola Bottlers Japan
at a Glance
Overview of Coca-Cola Bottlers Japan

11

Financial and Non-Financial Highlights

13

The Challenge of Value Creation
Our Value Chain

15

Commercial Activities

17

Supply Chain Initiatives

23

Initiatives for Infrastructure Enhancement

25

Initiatives for Creating Shared Value (CSV)27

Topics: CSV Initiatives Leveraging Our Strengths

29

Governance andFinancial Framework

01

Corporate Governance

31

Financial Data, Company Profile, etc.

3902

Top Message

Improving corporate value even in difﬁcult times

Representative Director & President

Calin Dragan

Delivering happy moments throughbeverages

Our strengths in value creation,and the role of our business model
Our Company is committed to the continued
creation of value for our stakeholders by leveraging
our assets, our capital, and other strengths such asbrand power, cost leadership, competitive humanresources, a solid financial position and deep
connections in our communities. To this end, we
have built a robust value chain in close collaboration
with The Coca-Cola Company. As a member of the
global Coca-Cola system, we are part of network in

03

Strengthening collaboration with
The Coca-Cola Company to achieve
innovation
We are working more closely and effectively as one
Coca-Cola system with The Coca-Cola Company
and other partner companies in Japan as we havescaled up in size and capabilities. Before 1998,
there were 17 Coca-Cola bottlers in Japan. The
launch of Coca-Cola Bottlers Japan in 2017, which
now represents about 90% of Coca-Cola Company
sales volumes in Japan, contributes to strengthened
collaboration across the Coca-Cola system, faster
decision-making, stronger innovation and better
marketplace execution.

Focusing on fundamental business
transformation for sustainable growth
We are fundamentally transforming our business toachieve innovation and sustainable growth over the
medium- to long-term. This includes reviewing cost
structures across our value chain, including in the
key vending channel, which is an important profit
driver, rebuilding the route sales model across retailchannels, strengthening our manufacturing system
to meet diversifying consumer needs and achieve
innovation, and rolling out the Shinsei Project thataims to build a supply network that achieves highquality, low cost, and stable supply. We are also
standardizing business processes, promoting digitaltransformation, and prioritizing people development
as we work to establish a resilient cost structure thatcan respond in an agile way to changes in theenvironment. The key to achieving suchtransformation is prioritizing management resources
to leverage the scale of our business. To return to a
growth path, we are undertaking fundamental
transformation based on the concept that "businessas usual is not an option".

Keeping our sights on medium- tolong-term growth while deliveringresults in the near term
In 2020, our net sales fell significantly from theprevious year due to the COVID-19 pandemic.

Business income, however, was positive andexceeded the revised plan that we announced in
October. We achieved this through actions committed
to protecting the business in the current challenging
environment, including major cost reductions in excess
of 35 billion yen through the formulation and executionof flexible plans to address rapid changes in thebusiness environment. At the same time, we areadvancing transformation initiatives that will contributeto medium- to long-term growth, and we achieved
fixed cost reductions and other results that willcontinue to deliver into the future. We expect to reachmore profitable growth when the market situation starts
to normalize. In February 2021, we sold our
Healthcare and Skincare business, in line with ourcommitment to simplify and optimize our operations tofocus on the core beverage business. Looking ahead,
we will concentrate management resources on thebeverage business to further strengthen our
infrastructure for sustainable medium- to long-term
growth.

Our response to the COVID-19
pandemic and risk management
initiatives

Top Message

Our mission is to deliver happy moments to everyone,
while creating value. Beverages are both lifestylenecessities and small luxuries to enjoy. As a “total
beverage company”, we deliver safe products that
customers can drink with peace of mind, and we areworking to create new market opportunities while
meeting the diversifying needs of customers throughinnovation. Despite Japan having a declining birthrate
and aging population, the soft drink market in Japan
has been gradually growing for the past 25 years.
Even with coronavirus restrictions, the market in 2020
was about 23% larger than in 1995. This is due toexpansion of consumption opportunities, meaning theappearance of new sales channels, beveragecategories, and packages. Through such innovations,
we want to contribute to the sustainable growth of ourCompany and to the development of the soft drink
market. This, we believe, will further support our
Company mission to deliver happy moments toeveryone while creating value.

which we can tap into success stories, experiences,and knowledge from across Japan and the world.
Through this robust value chain and our scale as abottler, we will work to maximize the value that we
provide in the Japan market.

Leaders' Perspective : Our Value Creation Story

For the beverage industry, 2020 was a year ofdifficulties unlike any other in our experience. Our
Company, too, was affected by the novel
coronavirus (COVID-19) pandemic, with a clear
impact on our financial performance. Under thesetrying circumstances, we emphasized "Safety &Security," "Agility," and "Resilience" with priority on
the safety and peace of mind of our stakeholders, as
we made every effort to supply the beverages thathave become lifestyle necessities. We were able tonavigate this unprecedented challenge by focusing
on areas we can control, such as continuing andaccelerating major transformation initiatives aimed atfuture business performance, while minimizing theeffects of sharp changes in the current environment
through cost savings and other mitigation measures.

While enacting comprehensive countermeasures
including measures to prevent the spread of infection,
we worked toward ensuring business continuity. As wecarried out our responsibility to supply the beverages
that are lifestyle necessities, we protected our businessagainst major drops in demand, quickly and flexibly
formulated and executed plans to secure cash andprofits, focused on cost reductions and curtailing someinvestments, and accelerated key transformation
measures to hold down our cost base. As a company
with roots in our communities, we also acted swiftly tosupport local communities by donating products
through the Japan Medical Association and foodbanks. We have taken every measure possible toovercome this unprecedented crisis. Our Company
has introduced an Enterprise Risk Management (ERM)
function and is working to make appropriate decisions
on the basis of risks and opportunities. With the current
uncertain environment expected to continue, we will
work to further strengthen our ERM system. We will
undertake actions aimed at identifying andunderstanding company risks and putting in placecountermeasures to ensure we are able to achieve ourorganizational goals and business plans and foster an
overall culture of risk management.
We believe that it will take some time for the COVID-19

04

Message from the CFO

Top Message

Creating shareholder value by
driving transformation and building

Human resources and corporate
governance that support businessgrowthFrom the standpoint of corporate governance, wehave appointed seven outside directors among ournine Board of Directors members. Our intent here is tobuild a system that will improve management quality,
efficiency and transparency in order to increase
corporate value and shareholder value over time.
Importantly, our board structure reflects diversity ofgender, age, nationality, and relevant experience
across multiple business domains. In the area ofexecutive compensation, we have established asystem that promotes improvement of medium- tolong-term corporate value and the alignment ofinterests with shareholders, with performance-linked
bonuses and stock-based compensation programs.
We will continue such efforts to further improve ourcorporate governance.

Creating Shared Value (CSV)

Our Company places Creating Shared Value (CSV) at
the core of our management as we engage ininitiatives to create shared value with society. In 2019,
together with The Coca-Cola (Japan) Company, weformulated a sustainability framework that identified thethree platforms of Inclusion, Communities and05

Dialog with stakeholders improves ourmanagement
I want to make use of the voices of our shareholders,investors, and other stakeholders to improve ourmanagement of this business. I view our interaction at
events such as the General Meeting of Shareholders,earnings presentations, individual meetings, domestic
and overseas events, and other opportunities as
extremely valuable. In 2020, with few opportunities forface-to-face meetings, we began sending out shortvideo messages from management to communicate
updates on our Company, and we have leveraged
various digital and online tools to facilitate regularcommunication. We want to continue deepening our
engagement in order to make progress on our mission
to deliver happy moments to everyone, while creating
value.
I thank you for your continued support of ourCompany.

an agile and resilientbusiness foundation
Representative Director & Vice President, Chief Financial Officer

Bjorn Ivar Ulgenes

Review of 2020
In 2020, the domestic soft drink market shrank versus
the previous year due to a significant decrease indemand caused by the novel coronavirus (COVID-19)
pandemic. Our Company has been affected by
COVID-19 and by the decision to postpone the Tokyo
2020 Olympic and Paralympic Games until 2021.
While enacting measures against these impacts, wedrove fundamental transformation across ourbusiness as part of our medium-term management
plan under the concept of "business as usual is not an
option".
Looking at our business performance in 2020,
revenue decreased due to declining sales volume
caused by COVID-19 and other factors. However, by
accelerating transformation and delivering cost
reductions of over 35 billion yen, we achieved positive
Business Income, better than the revised plan.
We focused on initiatives to respond quickly tochanges in the market environment as a large decline
in demand became apparent. People staying at homeand refraining from going out as well as closures andshortened business hours for restaurants led to
declines in sales volume in the retail & food, vending,and convenience store channels. Conversely, volume
increased in the drugstore & discounter, supermarket,
and online channels as we successfully captured
growing demand in at-home consumption and buying
in bulk. New products including the “Fanta Premier”
series and “Georgia Latte Nista” also contributed tosales. Looking at market share, the value share of thevending channel has maintained growth momentum
as our efforts to transform this important channel areshowing results. Moreover, the value share of theover-the-counter channel showed an improving trend
toward the end of the year as we started to recovermarketing investments and targeted sales promotionsin the fourth quarter after the initial COVID-19 impact
in the second and third quarters. The Lemon-dou
alcohol brand has performed well since its nationwide
expansion in October 2019, while maintaining a sales
price premium. In 2020, the sales volume ofLemon-dou greatly exceeded the initial plan andrepresents a success story in our efforts to tap into
new growth opportunities.
Our supply network is an important factor in returning
to a growth trajectory. We have rapidly expanded ourmanufacturing capacity for aseptically filled products
to meet growing consumer demand, and also to
introduce new technologies to produce exciting andinnovative new products. We have introduced seven
new production lines in the past two years, including
the new Hiroshima Plant that replaced the Hongo
Plant which was flooded during the heavy rains inWestern Japan in 2018. With this, we believe that our
supply network has been normalized and fast,
efficient and high-spec manufacturing infrastructure isin place.

Top Message, Message from the CFO

To me, human resources and organizational strength
constitute the most important infrastructure inbusiness. In addition to training the local sales
representatives who interact with consumers andcustomers as beverage professionals, we are also
selectively making use of international talent bytapping into the global Coca-Cola network.
Furthermore, we are making efforts to strengthen
diversity and inclusion, promote varied work styles,
and build an organizational structure that lets all
individuals make the most of their abilities. We willcontinue actively investing in our people to further
develop the competitive human resources that are thestrength and the future of our Company.

Resources, and nine priority issues to be addressed.
Each of these areas are linked to the Sustainable
Development Goals (SDGs) and we are actively
working to contribute to their achievement. To achieve
the unique "2030 Packaging Vision" of the Coca-Colasystem in Japan and The Coca-Cola Company's
global goal of a "World Without Waste," we have set
ambitious targets on using recycled and plant-derived
PET resin in our packaging to encourage a closed loop
“bottle-to-bottle” recycling system, reduce reliance on
petroleum in packaging and address the issue of
packaging waste. We have also set our own
non-financial CSV Goals, and are taking action toachieve ESG-related targets.

Leaders' Perspective : Our Value Creation Story

pandemic to draw to a close, and the uncertain
business environment is expected to continue.
In a "New Normal" period, what was earlier
commonplace will no longer be so. We have to
respond to all changes, including changes in
consumer purchasing behavior. As we work tocontinue our business and secure profits, we will takethese changes as opportunities, not threats, and will
work to capture new needs and growth opportunities.

As efforts to improve our infrastructure, we havetransformed the cost structure of our key vending
channel and back-office routines as well asorganizational structure. We have also introduced
work process standardization and digitaltransformation, promoted new work styles, andpushed forward the fundamental transformation of ourbusiness.

The outlook for 2021
In 2021, some recovery in the domestic soft drink
market is expected as we cycle the initial impact of
COVID-19 in 2020 and after the effects of thepandemic have run their course. However, thetimelines for vaccination and market recovery remaindifficult to predict, and a period of uncertainty is
expected to continue. Under these circumstances, we
focus on initiatives in areas under our direct control
and continue to drive fundamental business
transformation initiatives aiming to return to a growthtrajectory. These initiatives Include ongoingorganizational reforms, digitalization, furthertransformation of our cost structure, balanced sales
promotion activities focused on priority “Big Bet”
products and innovation, and continued
consumer-oriented investments aimed at expanding
selling space and growing market share.

06

Board of Directors (As of March 25, 2021)

Message from the CFO

Governance &Independence
Executive Directors

2
22%

We will make selective investments in manufacturing,logistics and distribution infrastructure, including
facilities to introduce new packages and new
products such as alcoholic beverages. As a part of
the “Shinsei Project” aimed at building a high-quality,
low-cost, stable supply network, the new Saitama
Mega Distribution Center, a high-capacity automatedwarehouse, began operations in February 2021, andthe next “Mega DC” in Akashi is scheduled forcompletion at the end of 2022. We will continue ourwork to optimize inventory and sales center locations
that will operate in sync with the commissioning ofeach Mega DC.
Moreover, we will continue activities aimed atachieving our ESG targets based on creating value
together with communities, including the execution ofa people strategy grounded in our mission, vision,and values, while also achieving our 2030 Packaging
Vision that aims for a “World Without Waste”.

*Source: Based on 2019 Euromonitor survey, number of stores.

07

Under our medium-term business plan, our Company
is working to improve its corporate value under three
key financial strategies: "Investing for growth," "Goodstewardship of capital," and "Creation of shareholder
value". Initiatives that we consider key to this policy
include the establishment of a resilient cost structurethat can respond swiftly to changes in theenvironment, the enhancement of efficiency throughstandardization of business processes and promotionof digital transformation, and the improvement of ourbalance sheet from the perspective of goodstewardship of capital.
In 2020, our focus was to ensure an appropriate cash
position amid the uncertainty and volatility of
COVID-19. We cut back on a planned investment
including new purchases of vending machines in
response to changes in the market environment, while
we continued investments to drive fundamental
business transformation for medium- to long-term
growth. We secured cash of 15 billion yen through thesale of under-utilized assets and cross-shareholdings,
and generated an additional 45 billion yen in cash in
the first quarter of 2021 by selling our Healthcare andSkincare business QʼSAI CO., LTD. in February 2021.
This year too, we focus on good stewardship ofcapital to ensure a solid financial position, sufficientliquidity, and appropriate cash flows while evaluating
priorities for capital allocation, including ROI-focused
capital expenditures and dividends.
Since our integration in 2017, we have been
optimizing our balance sheet with a view toward
improving shareholder value, including stabledividend payments, establishment of a dividend
policy, initiation of share repurchases and issuance ofcorporate bonds. In 2020 we reduced dividends dueto the tough business environment and our financial
results. For 2021, prioritizing stable dividend payout,
we plan to return to the dividend level of 2019 for anannual dividend of 50 yen per share with an interim
dividend of 25 yen and a year-end dividend of 25 yen.
While the uncertain business environment is expected
to continue, we continue to drive the fundamental
transformation of our business, establish an agile andresilient business foundation, improve profitability and
ROE, and work toward the improvement of ourcorporate value. Also, I would like to continue active
dialogue with our stakeholders, including shareholders
and investors amid a period of uncertainty.

Independent Directors

Representative Director andPresident

Calin Dragan

Has worked with Coca-Cola bottlers,
including in Japan, for about 20 years.
Most recently, served as President of
The Coca-Cola Company's Bottling
Investments Group.

Representative Director andVice President,
Chief Financial Officer

Bjorn Ivar Ulgenes

Has experience with finance in
the Coca-Cola system in Europe, theMiddle East, Africa, and Japan. Most
recently, served as Deputy FinanceDirector of The Coca-Cola Company's
Europe, Middle East, and Africa(EMEA) Group.

Outside Director,
Independent Director

Hiroshi Yoshioka
Has management experience withSony Corporation and global insights.
Previously served as an outside
director of Coca-Cola East Japan.

556%
Outside directors in Audit &Supervisory Committee (ASC)4100%
Diversity andProfessional Skillset
Women on the Board

2
22%
Outside Director,
Independent Director

Hiroko Wada

Has abundant experience inmarketing, management, andorganization and human resource
development in the consumer goods
industry. Has served as a director of
The Procter & Gamble Company(U.S.),
and representative director andpresident of Dyson Ltd. and of
Toys "R" Us-Japan, Ltd.

Outside Director,
Independent Director

Hirokazu Yamura
Has worked with Coca-Cola bottlers
in Japan for about 15 years.
Currently serves as Representative
Director & President ofMichinoku Coca-Cola Bottling Co., Ltd.

Outside Director (serving on the
Audit & Supervisory Committee)

Irial Finan

Has extensive management experience,with many years of involvement in the
management of The Coca-Cola Company
and in the Coca-Cola business as therepresentative of the Bottling Investments
Group supervising Coca-Cola bottlers
worldwide. Currently serves as Director of
Coca-Cola European Partners.**Company name changed to Coca-Cola Europacific Partners.

Message from the CFO, Board of Directors

Looking at initiatives by sales channel, we continue toaim for sustainable growth in the key vending channel
by increasing ROI-focused vending machine
placements in locations with high profit potential, andthrough a digital strategy that leverages tools
including our “Coke ON” smartphone app. In the
online channel where demand is increasing, we will
strengthen initiatives to launch of products that fit thechannel's characteristics.

Financial framework for shareholder value
creation

Leaders' Perspective : Our Value Creation Story

Amid changing consumption trends and channel mix
under the ongoing impact of COVID-19, we aim to"grow where the growth is" in close cooperation with
our partners at The Coca-Cola (Japan) Company, toachieve sustainable growth even in the "New Normal".
As one example of growth initiatives, we expanded
our lineup in the Lemon-dou alcohol brand with thelaunch of “Lemon-dou Kamisori Lemon”, at the end of2020 to further enhance our presence in thealcoholic beverage category. We are also expanding
our in-house production capacity for alcoholic
beverages to meet the growing demand. We intend tofurther strengthen activities in other growth categories,
including expansion of the “Fanta Premier”
series lineup, the launch of high value-addedfunctional products like “Karada Odayakacha W”(Food with Functional Claims) and the premium“Georgia Latte Nista” series, as well as theintroduction of “COSTA COFFEE”, Europe's largest*
café brand.

Nationalities

6
Finance/Audit

5
56%
FMCG

6
67%
IT/Supply Chain

Outside Director (serving on the
Audit & Supervisory Committee),
Independent Director

Outside Director (serving on the
Audit & Supervisory Committee),
Independent Director

Has IT and supply chain experiencein multinational corporations, as well
as a wealth of management experienceat Nissan Motor Company Ltd.
as well as Nishimoto Co., Ltd.

Has a wealth of experience in financeand accounting, including managing
her own finance consulting company
as well as management experience inLehman Brothers Japan Inc.

Celso Guiotoko

Nami Hamada

Outside Director (serving on the
Audit & Supervisory Committee)

Vamsi Mohan Thati

Demonstrates strong leadershipin a variety of fields within
the Coca-Cola Company Bottling
Investments Group, and has global
corporate management experience in
the Asian region. Currently serves as
President of the Greater China andMongolia Operating Unit.

2
22%
Coca-Cola System
Experience

556%
Figures in circles represent thecorresponding number of directors.
The figure for nationality
represents the number ofnationalities of the directors.

08

TOPICS

Highlights of 2020 and the First Half of 2021

Our response to the novel coronavirus (COVID-19) pandemic
In response to the COVID-19 pandemic, our Company is taking actions that prioritize the safety and health of
consumers, customers, employees and our local communities. Despite the challenges of these times, we areundertaking comprehensive countermeasures and maintaining the safe and secure supply of products todeliver happy moments to everyone, and are striving to provide products and services essential to daily living,as stated in our mission. We are also continuing initiatives by which we offer support to local communities
through our beverage products.

To meet increased at-home consumption demandduring the COVID-19 pandemic, we quickly
introduced new measures such as offering casesales and bulk purchasing, and labelless
packaging for the rapidly growing online channel.

Flexible work styles
We provided all employees with smartphones and web camera-equipped PCs. Through the use of
information and communications technology, wewere able to make a smooth transition to working
from home. We actively worked to introduce
programs and improve the environment topromote flexible ways of working. Our efforts
included the introduction of Super Flextime withno core time, the establishment of satellite offices
in about 100 locations, expansion of "direct toclient, direct to home" commuting for sales staff,
and promotion of bicycle commuting.

Product donations
As support for local communities during the
pandemic, we donated 80,000 cases (about
1.92 million bottles) of our beverages to medical
institutions, food banks, and other organizations.
Our company is acting swiftly to support
communities in times of need.

09

Expansion of Lemon-dou alcoholic beverage
Our alcohol beverage Lemon-dou, which launched nationwide in
October 2019, is a select lemon sour inspired by the great tasteof sours found in bars. In 2020, Lemon-dou Teiban Lemon
achieved the top market share* in the lemon sour category, andhas been very well received by consumers. In December 2020,
we launched the sugar-free, non-sweet Lemon-dou Kamisori
Lemon featuring 9% alcohol and 9% lemon juice. We launched
500ml cans of Teiban Lemon and Kamisori Lemon under the name
Lemon-dou Home Run Size in April 2021, and are working to growthe number of loyal consumers and fans. We will further expand ourpresence in the alcohol
category by enhancing ourbrand portfolio and in-houseproduction capacity in the
future.

Cumulative sales volume of Lemon-dou

Million
cases
10
9
8

Cumulative sales volume

Over 10 million cases

TOPICSIn the vending channel, we covered the productselection buttons and other high-touch parts ofvending machines with antiviral and antibacterial
film to increase consumers' peace of mind.

In June 2020, we began operations at our new Hiroshima Plant,
replacing the Hongo Plant in Hiroshima Prefecture that was shut
down due to flooding damage caused by heavy rains in westernJapan in July 2018. The Hiroshima Plant is equipped with two
aseptic lines (manufacturing lines for aseptic filling) capable ofhigh-speed production of small and large PET bottle soft drinks,
about 1.5 times the production capability of the Hongo Plant. The
plant is capable of automated transport of preforms (the basis for
PET bottles), caps, case cartons, and other materials from an
automated warehouse, along with monitoring of overall line
operational status through remote surveillance systems. It is
working to achieve low-cost operations through the introductionof the latest IoT technology and the automation of equipment. The
Hiroshima Plant plays a core role in product supply in the
Chugoku/Shikoku area.

Leaders' Perspective : Our Value Creation Story

Sales activity during the pandemic

Start of operations at the new Hiroshima Plant

7
6
5
4
3
2
1
0

2018

2020

May

December

Pilot sales (Kyushu)

Expansion to all areas*Source : Intage (January-December 2020, nationwide excluding Okinawa, chuhai market 350ml can by SKU, value basis)

New package sizes to drive growth（350ml PET, 700ml PET）
In 2020, we test marketed new 350ml and 700ml PET
bottle sizes to replace 500ml bottles for brand Coca-Cola insupermarkets, drugstores, and discount stores in the Tokyo
area. This differentiates the price and package size offeringin these channels and better serves consumers' needs for
single-serve immediate consumption and sharing options
among smaller households. We have seen promising results
and an increase in the number of purchase transactions in
the pilot test. From 2021, we are offering these new
package sizes nationwide across our full sparkling beverage
portfolio to also include Fanta, Sprite, and Canada Dry
Ginger Ale.

10

Overview of Coca-Cola Bottlers Japan

Sales area

Consumers in sales area

Brands(As of April 2021)

About

Tokyo, Osaka,
Kyoto and

112

About

40

Over

(About 51 million households)

600

Annual sales volume

Sales coverage

Portfolio

Other（Volume base）

Juice

500
cases

million

90

About
%
of the Coca-Cola system
in JapanCoffeeK

About

Sales centers(Including distribution centers)

About

Manufacturing plants

700

17

K

plantsCoca-Cola Bottlers Japan at a Glance

35 prefectures

About

250

SKUs
million

Vending machines

Customer outlets

Employees

Fleet vehicles(Not including temporary workers)

Sparkling
Category

Non-sugar
tea

Water
Sports330 14,500 16,000
About

About

About

Overview of Coca-Cola Bottlers Japan

Note : As of the end of 2020 unless noted otherwise

History of our Company(Background to major mergers and consolidation)
Five bottlers, including our Company, currently produce and sell Coca-Cola products in Japan. Since 1999,

we have expanded the scale of our business through business integration to become Japan's largest bottler,
handling over 90% of the sales volume in Japan.

1998

March 2017bottlers

bottlers

17

6

From April 2017to present

5bottlers

Coca-Cola Bottlers in Japan other than CCBJH
Hokkaido Coca-Cola Bottling Co., Ltd.
Michinoku Coca-Cola Bottling Co., Ltd.
Hokuriku Coca-Cola Bottling Co., Ltd.
Okinawa Coca-Cola Bottling Co., Ltd.

11

12

Financial and Non-Financial Highlights

Financial Highlights (IFRS)Revenuebillion yen

927.3

Inclusion

Business Income

792.0
837.1

Non-Financial Highlights

914.8

792.0 (billion)

0. 2

billion yen

40.2(billion)

23.3

2020

2017

2018

2019

2020

22

％

％

Number of employees who used childcare leave

153％

Coca-Cola Bottlers Japan at a Glance

2019(As of March 25, 2021)

Surpassed initial 6% target and set a new target of 20 % by 2030.

2.45

0.2
2018

6.2

(As of the end of January, 2021)

Employment of people with disabilities*

15.0

2017

Women on the Board of Directors

Women in manager positions* Figures are the total of CCBJI and the Coca-Cola Bottlers Japan Benefit Inc. in the “Employment Report for Persons with Disabilities” (June 1, 2020) submitted to the Director of

Net Income Attributable to Owners of the Parent

Cash and Cash Equivalents at End of Fiscal Yearbillion yen

billion yen

22.0

10.1
2017

(58.0)

2018(billion)

126.4
118.7

(4.7)

113.8

126.4

2017

2018

2019

Disaster relief
agreements

Donation of products
through food banks

Disaster support
vending machines
災害情報・
・
・

(billion)

65.5

2020

Communities

Financial and Non-Financial Highlights( 4.7 )

Public Employment Security Office, 2020.

1,059

2020

About

20,000cases

Over

3,300

2019

Resources
EBITDA

Capital Expenditure

65.5

billion yen

103.9

65.5
42.5

2017

53.1

2018

2019

59.1

billion yen

81.6(billion)

2020

Water used per 1L of product

2017

70.8

2018

72.0

2019

3. 23

L/L

- 0 . 03 L/L(YoY)

59.1(billion)

2020

Note1 : In 2020, the Healthcare and Skincare business has been classified as a discontinued operation as a result of the decision to sell all shares in Q'sai held by the Company.
As a result, Revenue, Business Income and EBITDA for 2020 are the amounts for continuing operations excluding discontinued operations.
Note2 : We introduce “Business Income” as a measure of our underlying or recurring business performance after the adoption of IFRS. Business Income deducts cost of goods andSG&A from revenue and includes other income and expenses which we believe are recurring in nature.

Recycling rate of industrial waste

99.9

%

Energy used per 1L of product

0.88

MJ/L

+ 0 . 01MJ/L(YoY)

CFC-free vending machine ratio

79.6

%

Note : Non-Financial Highlights are for the beverage business (As of the end of 2020 unless otherwise noted).

See the CSV Report for details

https://en.ccbji.co.jp/csv/doc.php

Note3 : EBITDA = Business Income + depreciation and amortization expenses

13

14

Our Value Chain

Our foundation

6 forms of capital

Our value chain closely alignedwith Coca-Cola (Japan) Co., Ltd.

Value provided

Strengths
The system is composed of Coca-Cola (Japan) Co., Ltd., which supplies beverage base,Intellectual capitaland other affiliated companies that manufacture and sell products. Bottlers, including ourCompany, manufacture products under strict quality control at their respective plants, and

Brand

Manufactured capital
Planning▶Different work styles that allow
employees to maximize theirtalents

Natural capital▶Water, which is the source of ourvalue creation, and other natural
resources

Creating
shared value(CSV) withsocietySocial capital

Financial capital▶Good stewardship of capital▶Solid balance sheet▶Shareholder returns

15

Production of beverage baseProduct
manufacturing
Logistics

Communities

E n v i r onment

Human resources , IT, CSV
Robustfinancialfoundation

Pursuing employee satisfaction
through the Company andemployees learning, growing,
and sharing profits together

Realization of CSV (creating
shared value) that contributes
to business growth andcommunity development

Foundation for creating value▶The trust of our stakeholders
and their support for CSV
initiatives▶Close involvement in community
activities throughout our salesarea

Our value chain
Sales
Marketing〉〉〉▶Employment of diverse andinclusive human resources

Competitive
human
resources

Coop eration〉〉〉

Human capital

Value Chain

Researchanddevelopment〉〉〉

Marketing Coca-Cola (Japan) Company▶A network of vending machines
covering our entire sales area

E m p loyees

Procurement

Our Value Chain▶Cutting-edge management systems,
facilities, and technology in our
production plants

Collection
andrecycling

〉
〉
〉

〉
〉
〉

Sales planning

〉
〉
〉

Cost
competitiveness

Building long-term relationships
and expanding business
opportunities through sustainablegrowth of the Company

〉
〉
〉

〉
〉
〉

The Challenge of Value Creation

Suppliers▶Close relationships with The
Coca-Cola Company, including
the Coca-Cola (Japan)
Company, and members of the
Coca-Cola system in Japan▶A raw materials procurement
network, leveraging the scale of the
global Coca-Cola system, thatfacilitates the production of safe andtrustworthy products

Pursuit of customer satisfaction
through delivering high-quality
products and services

deliver Coca-Cola products to consumers through vending machines and customers' stores.

〉〉〉▶Marketing and R&D expertise tomeet the needs of our customers

plans and develops new products, and conducts marketing activities, and bottling companies〉〉〉▶Key global brands, led by“Coca-Cola,” and brands loved
in Japan

The Coca-Cola system
in JapanConsumers/ Customers

Governance
Mission, Vision, and Values

Contributing to the promotion anddevelopment of a low-carbon
society, a circular economy, and asociety that coexists with nature
through our businessS h a reholders
Improving shareholder value
through profit growth andenhancement of shareholder
returns

16

Commercial Activities

Message from Head of Commercial
Executive Officer, Head of Commercial

Costin Mandrea
I'm Costin, Head of Commercial. I am responsible forformulating the Company's growth strategy, customer
and sales plans and executing sales activities in themarket. Our Company works closely with The
Coca-Cola Company across various processes, fromstrategy to execution to digitalization. While leveraging
the assets of the Coca-Cola system, we are constantly
competing in the market to be the preferred choice ofour customers and consumers, and we are proud of
our scale, professional sales force and Coca-Colabrand love in the Japanese market.

While the uncertain environment is expected tocontinue in 2021, we have set a goal of achieving value
share growth on a year-on-year basis, based on our"Winning in the Market" targets. Our growth strategy iscentered on “strengthening our portfolio”, “transforming
the vending business”, “perfect in-store execution”, and“excellent customer management”. We will continue tomake progress by further optimizing pricing andtransaction conditions, collaborating with
The Coca-Cola Company, and of course supporting
The Coca-Cola Companyʼs sponsorship of the Tokyo
2020 Olympic and Paralympic Games as a solid
foundation to achieve our targets. We are making
significant efforts to strengthen our Commercial
capabilities, with powerful training and development
programs, run in an agile way.
We have already launched multiple “Big Bet” products
in 2021, including “Karada Odayakacha W,”“Ayataka Café Matcha Latte,” “Georgia Latte Nista,”“Yakan no Mugicha” and “Icy Spark.” In April welaunched “COSTA COFFEE,” Europe's largest* café
brand. In addition, we expanded sales of 350ml PET
and 700ml PET bottles, which were sold on a test
basis last year, for Coca-Cola and other sparklingbrands nationwide. We will continue to capture at-homeconsumption demand through new packages, casesales and multi-pack sales. We also plan to roll out
cross-channel promotions utilizing our Coke ON
smartphone app, which has reached over 25 million
downloads. In marketing activities, we intend to focus
on simple, impactful and profitable activities that drive
growth, while continuing to partner with Supply Chain,
Finance and all support functions to drive value. In
CCBJI we all work to “Sell or Help to Sell”, and throughthis we can achieve our mission of delivering happy
moments to everyone, while creating value.
*Source: Based on 2019 Euromonitor survey, number of stores.

［ Trends in Market Size (Shipment volume - physical case)］
1995

2020

Water

Other

3%

19%

Other

13%

Convenience
Store

7%

Channel

15%

Supermarket

18%

13%

15%

Sports

Juice

Convenience
Store

15%

Category

22%

Tea

22%

Vending

48%

Other

Other

Sparkling

Vending24%

SportsChannelCoffee

Water

14%
5%

Supermarket

25%

9% 15%

Sparkling

Category

Coffee

Tea

41%

Juice

8%

30%

19%

Millions of cases

2,000

1,779

1,800

1,600

Commercial Activities

17

In 2020, due to the COVID-19 pandemic and the
postponement of the Tokyo 2020 Olympic andParalympic Games, we made the decision to focus onwhat is in our control amidst so much market
uncertainty. First and foremost, we prioritized the safetyof our consumers, customers and employees while
continuing to ensure a safe and secure supply of
products and superior customer service. We adjusted
the number of new product launches and marketingpromotions and made it our priority to focus onprotecting the bottom line in the short term. Finally, we
accelerated important transformational initiatives toensure a solid foundation for the future. It is true that theresults for the year were not ideal, but our focus onwhat was in our direct control paid back. In spite of amore limited marketing spend during the peak impactof the pandemic in 2020, new products made a strong
contribution. We successfully launched “Fanta Premier”
and “Georgia Latte Nista” which have established agood base for continued results in 2021. Moreover,growing demand for at-home consumption led to
growth in bulk purchasing at retail stores, which wewere able to tap into through agile actions that included
the expansion of case sales and the introduction oflabelless products. Our vending market share showed
a positive trend, achieving 26 consecutive months of
year-on-year increases in value share as of May 2021.
We are also seeing positive results from steady actions
such as the selective expansion of high-quality vending
machine placements, optimized product selection
based on location and leveraging the Coke ON app asa digital platform to engage with consumers and drive
transaction growth. In addition, our “Lemon-dou”

We were able to accelerate the completion of our main
Commercial transformation initiatives into the first half ofthe fiscal year, six months ahead of plan. We improved
the work efficiency of vending operations staff throughconsolidation and division of labor of vending
operations, ranging from dynamic visit plans forvending machine service routes, loading andunloading products at sales centers, machine refilling,
travel, inventory checking and settlement work.
Through such efforts, we reduced the number ofvending routes by about 20%, and vending channel
fixed costs declined by about 10% on an annualizedbasis. This creates a solid foundation to build upon
once vending volumes and consumer traffic start torecover after the pandemic. In terms of sales execution,
we redesigned the processes from end to end, with afocus on customer service and efficiency. Our
salesforce now is digitally-enabled, agile and focusedon winning at the point of sale.

The NARTD market in Japan has been growing steadily, with market scale expanding by 23% over the past 25 years.

The Challenge of Value Creation

Since the establishment of Coca-Cola Bottlers Japan in
2017, the Commercial function has focused on creatinga “CCBJI Commercial Way of Operating” and rethinking
our organization. We have built a robust and integrated
structure, including the merging of Coca-Cola
Customer Marketing Company, the point of sales
contact for nationwide chain customers and CCBJV, an
integrated company to operate our vending machines.
We have also worked to build a flat organizational
structure, digitizing our salesforce, engaging andsharing success stories through new tools and focusing
on building required capabilities. In addition, we haveworked to eliminate redundant tasks and businessprocesses, focusing on achieving simple and low-cost
operations with a high level of customer service.

alcohol brand performed well, with 2020 sales volume
greatly exceeding our initial forecast to reach sales ofapproximately 8 million cases for the year.

The NARTD Market in Japan

1,445
1,400

1,200

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year

Source：Inryou Souken［CCBJI Sales Volume (2020 results)］
Other

1%

Juice

6%

Supermarket

Retail & Food
service, Online

25%

19%

ChannelVending24%

16%
Convenience Store

15%

21%
Water

8%

2%

Sparkling

Other

7%

Syrup

26%

10%

Small-sized
PET

Bottle canCoffeeDrugstore &Discounter

PowderOther

5%

Category

9% Sports
9%

Non-sugar tea

21%

Can

Package

39%

13%
Large-sized PET

24%

See earnings presentation materials for details

https://en.ccbj-holdings.com/ir/library/presentation.php

18Commercial Activities

Product Overview

Tea

As a "Total Beverage Company", we offer products across a wide variety of categories such as Sparkling,
Tea, Coffee, Water, Sports, and more.
［Key brands by beverage category］
S p arkling

Te a

Cof fe e

Wate rS p or ts

Karada Odayakacha W

In February 2021, we launched Karada Odayakacha W, Japan's first Food with Function Claims*
formulated with the functional ingredient GABA, which has effects on both memory and blood pressure.
GABA has found acceptance for its effects suited to persons with high blood pressure as well as its
support in improving memory, a part of the cognitive functions that decline with age. As lifestyles change
during the COVID-19 pandemic, an increasing number of people in their 40s and older are becoming
particularly concerned about memory loss and blood pressure. With its moderate astringency andrefreshing taste, this is a green tea that people can continue enjoying as a daily habit for health.

*See https://c.cocacola.co.jp/odayakacha/ for details of submitted claims of the product.(Japanese only)

Ayataka Café Matcha Latte

Sparkling
Coca-Cola NiziU Limited-Edition
Design Bottle

Full renewal of Coca-Cola Zero

The Challenge of Value Creation

In 2021, we are developing Ayataka into the Ayataka Café Series. As the first
product in the series, we released Ayataka Café Matcha Latte in March. Madewith plenty of 100% matcha, or green tea powder, it offers a refined milk tastethat enhances the flavor of matcha. Under the supervision of
Kanbayashi Shunsho Honten in Uji, Kyoto, a venerable tea shop with a historyof 450 years, and specialty coffee shop Sarutahiko Coffee, the product offers
a new tea deliciousness and the peaceful relaxation sought from a cafe.

Yakan no Mugicha from HajimeCommercial Activities

Our Yakan no Mugicha, released in April 2021, features 100% carefully
selected barley. This all-new barley tea is made through a commitment to flavor
created through care, using barley extract and Coca-Cola's originalhigh-temperature boiling method. Barley tea brewed with care and effort
quenches thirst while offering a human touch of warmth that provides arelaxing break.

CoffeeGeorgia Lattenista Creamy Latte
For our Coca-Cola, Coca-Cola Zero, and Coca-Cola
Zero Caffeine products, we released a Coca-Cola
NiziU Limited-Edition Design Bottle in collaboration
with NiziU, the global girls group stealing the
spotlight across Japan.

We gave Coca-Cola Zero its first full renewal in five
years in 2020, with a cleaner aftertaste that goes
down easily. The renewal brings the great taste ofCoca-Cola, with zero sugar and zero calories, to evenmore people as a refreshment on the go, on the job,or during study or housework amid the pandemic.

Fanta Premier Orange and Premier Grape
Fanta Premier Orange is a new product in our Fanta Premier Series. It expresses the taste of oranges through aspecial new manufacturing method that uses two types of orange pulp*, large and small. Together with the release ofPremier Orange in March 2021, we renewed the first Fanta Premier series product launched in March 2020, Premier

Grape. The drink offers a more refreshing

Georgia Lattenista is made using Georgia's unique "milk boost technology" to achieve therich taste of freshly poured-in milk, for enjoyment of a smooth milk aftertaste. As part of a
new lineup, in April 2021 we launched Creamy Latte, made with plentiful fresh cream from
Hokkaido, and renewed the existing Café Latte product.

New to Japan!
From April 2021, COSTA COFFEE, Europe's largest* café brand, has introduced PET
coffee products "COSTA Black" and "COSTA Café Latte". These new premium coffees allow consumers
to enjoy the taste of high-quality hand-brewed coffee, which COSTA COFFEE has been focusing on for
50 years in Europe, the home of coffee, in PET bottles. In addition, COSTA COFFEE, which aims tobecome a total coffee brand, is delivering the delicious taste of COSTA COFFEE across Japan throughvarious platforms such as café style and self-service system in addition to PET bottle coffee.

taste, with its fruitiness and premiere sense

unchanged. We plan to further strengthen the
Fanta Premier Series as a high value-added
product lineup.

*The thin skin that covers the flesh.

*Source: Based on 2019 Euromonitor survey, number of stores.

19

20

Commercial Activities

Channel Overview
Vending (Vending Machines)
The vending channel is a retail channel through which we sell products directly to consumers through ourapproximately 700,000 vending machines. Our efforts in this area include the placement of new vending machines,
the implementation of an optimal product lineup that leverages our core products, new products, and vending
machine exclusive products, and the roll-out of limited campaigns that use our Coke ON smartphone app.
In 2020, we offered a wide variety of limited-edition new products, and conducted campaigns through Coke ON,
including a weekly lottery for drink ticket prizes and a quiz that lets participants win stamps. We also strengthened
Coke ON Walk, which lets users earn drinks just by walking, and Coke ON Pay, which allows non-contact selection
and cashless purchase of products. In 2021, we
will work to offer new value matched to consumers'purchasing frequency and usage environment
through the roll-out of the Coke ON Pass
subscription system with fixed price purchases.

OnlineOnline is a wholesale channel in which we deliver products to consumers throughproduct sales to customers engaged in online sales, marketing on customers'
websites, and other sales support. We are working to strengthen activities, including
planning of campaigns in collaboration with customers to meet the growing demandfor beverages through online order.
In 2020, responding to growth of home consumption demand, we rolled out
environmentally friendly labelless products that reduce the hassle of sorting waste,
and a new carton configuration to sell multiple PET bottle products suited todemand for bulk purchasing. We further strengthened our loyalty programs throughattractive subscription programs, seasonal promotions, a stamp rally campaign thatawards points for purchases, and more.

The Challenge of Value Creation

Retail & Food Service (Kiosks, Restaurants etc.)
Retail & Food Services is a wholesale channel in which we sell products to customers operating stores, restaurants,
commercial liquor shops, and more, and offer consumers products and opportunities for enjoying drinks.

Supermarkets, Drugstores & Discounters

In addition to our regular activities, in 2020 we carried out activities to quickly
adapt to the COVID-19 "New Normal" including a strengthening of case sales in
response to rising at-home consumption demand. Moreover, to create newconsumer demand and sell products of appropriate volume at appropriate
price points (wholesale price), we began the roll-out of 350ml PET and 700ml
PET products for Coca-Cola and other products, and expanded the roll-out toother areas and brands.

Convenience Stores
Convenience stores are a wholesale channel in which we deliver products to
consumers by selling products to customers' stores and creating selling spacesthat support convenience. In addition to the introduction of new products, weare undertaking product planning for specific customer chains and limited
campaigns, among other activities.

Commercial Activities

Supermarkets, Drugstores & Discounters are a wholesale channel in which we deliver products to consumers by
selling products to customers' stores and creating attractive and engaging
sales displays. We are working to optimize our product lineup to create
attractive sales displays and the development of campaigns tailored to seasonsand events.

In 2020, we worked to improve our services to consumers and customers, centered on new products and coreproducts. At restaurants, we proposed drink menus using "mocktail" non-alcoholic cocktails made with our
products, and launched sales of channel-exclusive
products (250ml cans) designed with glass shot in mind.
We are adapting swiftly to the takeout and delivery
markets that are growing rapidly as people work at home
and avoid going out.

Marketing Topics

Coca-Cola Tokyo 2020 Olympics
Torch relay support program
Together with the Coca-Cola Company, the Presenting Partner for the Tokyo 2020 Olympic Torch Relay, we
are rolling out marketing campaigns that leverage the assets of the Coca-Cola system as we work toenergize the market. As a program to energize local regions through the Tokyo 2020 Olympic Torch Relay,
we developed The Coca-Cola Torch Relay Memorial vending machine for limited placement in municipalities
through which the relay will pass. The vending machines feature original wrapping labeled with themunicipality name and the date on which the Olympic Torch Relay passes through, playing a role in notifying
people of the relay. We worked to build momentum for the torch relay and to provide new value that will help
leave a legacy of international exchange, opportunities to encounter sports, municipal symbols, and thepassing through of the runners, even after the Olympic Games have ended.

In 2020, along with new product introductions, we responded to changes in theneeds of consumers working at home and refraining from going out, andintroduced 950ml PET products for Sokenbicha, Ayataka and Aquarius aimed
at-home consumption. We further secured selling spaces with multiple lineups
for the alcoholic beverage Lemon-dou, available nationwide since the end of
2019, and will continue to enhance the product's presence.

21

22

Supply Chain Initiatives

Message from Head of Supply Chain
Executive Officer, Head of Supply Chain Management

Bruce Herbert

I'm Bruce Herbert, Head of Supply Chain. I am
responsible for the formulation and execution of supply
chain strategies for our entire Group. We are responsible
for manufacturing, distribution, and sales among the
Coca-Cola System and other partner companies inJapan. For us, the supply chain is an important operating
foundation. In our medium-term management plan, we
have identified supply chainʼs cost reduction andimproved competitiveness as key areas of focus.

All of the seven new aseptic production lines are capableof high-speed production of 600 to 900 bottles per
minute (BPM) for small-sized PET bottles and 300 BPM
for large-sized PET bottles. We are also introducing
advanced IoT technology and promoting labor-saving
automation. Our cutting-edge production lines enable
automated transport of preforms (raw material of PET

23

In 2020, the SCM Headquarters laid a foundation for ourfurther growth. In 2021, the SCM Headquarters will
advance further into an agile organization that is ready tomeet the challenges of the day, building on thetransformational work over the last years as well as our
experience in responding to the unprecedented
challenges of the COVID-19 pandemic. We will continue
to execute on initiatives to strengthen our manufacturingsystem and optimize our distribution network, andprovide high-quality products to consumers andcustomers in a timely manner. As this uncertain
environment continues, we will only invest in necessary
investments that drive medium- to long-term growth, witha focus on ROI. Looking ahead, we will continue toactively promote digitalization and automation in the
supply chain, including procurement, manufacturing anddistribution, and further make efforts toward cost
reductions and efficiency improvements as we work tobuild an efficient and lean supply chain system for thedelivery of safe, secure, and high-quality products to
consumers.

To deliver safe and secure products to consumers, we procure ingredients, materials, and indirectmaterials meeting strict quality standards from suppliers who comply with our Supplier Guiding
Principles. The main items that we procure include the beverage base that are the basis for our
products, sugar, PET bottles, aluminum cans, cardboard, and vending machines and other sales
equipment. In addition to building relationships of trust with each supplier, we work to engage inenvironmentally considerate procurement and to reduce our procurement costs, through means
including promoting joint procurement, reviewing contract structures, reducing the weight and volumeof packaging and recycling. We also collaborate with the Cross Enterprise Procurement Group (CEPG), a
global procurement organization of the Coca-Cola system, to share success stories and other information andto execute procurement strategies that leverage the scale and knowledge of the full Coca-Cola system.

Manufacturing

Toward the expansion of our production capacity

Our Company has 17 plants within our operating areas. At each of these, we engage in flexible
manufacturing and work to build a supply network that optimizes the entire supply chain. In 2019 and2020, we focused investment on new manufacturing lines aimed at meeting the rapid upswing in demand
for aseptic products (particularly non-carbonated soft drinks) and torebuild manufacturing capacity following disastrous heavy rains inWestern Japan in 2018. We launched the operation of seven aseptic
lines, including the new Hiroshima Plant (see "Start of operations atthe Hiroshima Plant" on p.10).
Kyoto Plant(Kyoto Prefecture)
Hiroshima Plant(Hiroshima Prefecture)

Launched two new lines
in Februaryand October 2019

Launched two new lines in June 2020
Tosu Plant(Saga Prefecture)

Ibaraki Plant(Ibaraki Prefecture)
Iwatsuki Plant(Saitama Prefecture)
Saitama Plant(Saitama Prefecture)

Daisen Plant(Tottori Prefecture)

Supply Chain Initiatives

We have also worked to address the supply chain
challenges caused by the heavy rains and flooding inWestern Japan in 2018. Amid rapid growth for aseptic
products, as seen in the shift in consumer demand to
PET bottle coffee products, our former Hongo Plant was
damaged by the natural disaster and three productionlines, including key aseptic production capacity, werelost. To overcome this issue, we quickly reworked ourentire supply chain network, including increased
production to cover for the lost capacity, and put together
a product supply system from other areas to the
Chugoku region. In addition, with quick decision making
and agile execution, we were able to replace thedamaged Hongo Plant with the new world-class
Hiroshima Plant in 2020 with unprecedented speed.
From 2019 to 2020, we were able to complete theintroduction of a total of seven new aseptic lines,
including the Hiroshima Plant, as scheduled. This greatly
improved our manufacturing capacity for aseptic
products and efficiency across our nationwide supply
network.

For distribution, as a component of the “Shinsei Project”
which seeks to build a supply chain network that
achieves high-quality, low cost, and stable supply, our
new Saitama Mega Distribution Center (DC) began
operations in February 2021. The Saitama Mega DC is acore distribution center for the Tokyo / Saitama area andwill centralize and automate logistics operations such as
storage, product sorting and picking, which waspreviously managed at multiple small regional sales
centers. By utilizing this new mega distribution center, we
will start to realize our end-to-end supply chain networkthat delivers products in a timely and efficient mannerfrom manufacturing to customers and vending machine
operations. We are also pioneering equipment
automation that includes automated storage racks androbot picking systems, and have achieved high-density,
high efficiency warehouse operations.

High quality procurement by leveraging scale

The Challenge of Value Creation

The SCM Headquarters is working to build an efficient,lean supply chain system allowing us to produce anddeliver safe, secure, and high-quality products tocustomers at low cost. To achieve this, we are moving
ahead with productivity improvement initiatives,
digitalization, and automation in areas of planning,
manufacturing, distribution, and the systems that connect
them. During 2020, forecasting demand proved to be
more challenging due to the COVID-19 pandemic andrelated declines in consumer traffic and purchasing
behavior. However, as a result of the ongoing
improvements and investments we have been making
across supply chain planning, we were able to flexibly
adjust our product supply network to meet our consumersʼ
needs and minimize inventory risk and extra cost burden.

bottles), caps, and case carton materials from automatedwarehouses, as well as better and faster changeovertimes to enable flexible production of multiple products
and package sizes, and remote monitoring of theoperational status of manufacturing lines and equipment.
In addition to low-cost operations, we will continue thestrengthening of promotional capabilities throughinnovations that meet customer needs, including new
products and packaging, the enhancement of
manufacturing equipment for the introduction of alcoholic
products, and adoption of aseptic fruit pulp filling
methods.

Procurement

Zao Plant(Miyagi Prefecture)

Launched new line in July 2020

Ebino Plant(Miyazaki Prefecture)
Tokai Plant(Aichi Prefecture)
Komatsu Plant(Ehime Prefecture)
Kiyama Plant(Saga Prefecture)

Kumamoto Plant(Kumamoto Prefecture)

Akashi Plant(Hyogo Prefecture)

Tama Plant(Tokyo)Ebina Plant(Kanagawa Prefecture)

Hakushu Plant(Yamanashi Prefecture)

Launched new line in January 2020

Launched new line in March 2019

Distribution

Toward the optimization of our distribution network

As a part of our initiatives aimed at constructing a supply chain network for high-quality, low-cost, stablesupply, in 2020 we worked on the construction of the Saitama Mega DC, a cutting-edge automateddistribution center on the grounds of the existing Saitama Plant. The
Saitama Mega DC, which started operation in February 2021, isequipped with shipping capacity of about 85 million cases per year and astorage capacity of about 60,000 pallets. It has the largest capacity in
the Coca-Cola system in Japan. As a second project, we began
construction of the Akashi Mega DC on the grounds of the Akashi Plant in
Hyogo prefecture. Scheduled for completion at the end of 2022, theAkashi Mega DC will serve as a core center for shipment of about 80
million cases of product per year, primarily in the Kansai area. Along withthe restructuring of our distribution network, we are consolidating sales
centers, particularly locations holding inventory. These initiatives, andSaitama Mega DC automated picking systemothers allow us to better optimize our asset base and improve efficiency.
In 2020, we closed or consolidated 14 sales & distribution centers.
24

Initiatives for Infrastructure Enhancement

Initiatives to Leverage IT and Promote Digitalization
Introduction of the integrated Cokeone+ ERP system
About

350

ERP ofprevious
Bottler A

Task 1

Task 2

Task 1

Task 2(50

As of theendof 2020)

Task 3

Applications

Task 1

About

Duplicate
input

Applications

ERP ofprevious
Bottler B

Promotion of diversity & inclusion

Manualwork

Task 4

Applications

Task 2

Task 3

Task 4

Applications

Integrated
ERP
systemBolt-on system
Back oﬃce area + front oﬃce area
Common platform

Digitalization initiatives across business functions● Commercial

We also have revised internal rules (work regulations, persons eligible for childcare and nursing care regulations, etc.) toprovide equal opportunities to diverse employees in the company. In addition to these internal processes, we are further
enhancing our internal and external initiatives, such as announcing our endorsement of Business for Marriage Equality(BME), a campaign calling for companies to support marriage equality. BME works to raise the visibility of companies
that support the legalization of same-sex marriage (marriage equality) in Japan.

MSCI Japan Empowering
Women Index (WIN)The Womenʼs Participation
Promotion Awards

Initiatives for Infrastructure Enhancement

In the vending channel (vending machines), we are providing a digital platform to consumers through the
Coke ON* smartphone app. We are also constructing big data infrastructure and utilizing AI and machinelearning in sales forecasting, route plan simulation, and optimization of product lineup.
In over-the-counter channels, we are introducing tablets to our salesforce that enable "by-customer visualization"of product sales in real-time allowing for effective negotiations, and are working to strengthen our proposal
capabilities for creating optimal selling spaces through the use of AR (Augmented Reality) technology and image
recognition functions.

Our Company regards the promotion of diversity and inclusion as a key management issue. By respecting the diversityof our workforce, we provide opportunities to enable all employees to leverage their full potential, regardless of gender,
age, disability, nationality, sexual orientation, and other attributes, such as gender identity and expression, andunaffected by factors that could restrict their ability to work. Specifically, we are focusing on the promotion of active roles
by women, and actively engage in career support training and other programs for women and the creation of workplaceenvironments conducive to work. Our diversity management has received recognition, including inclusion in the New
Diversity Management Selection 100, the MSCI Japan Empowering Women Index (WIN), and the Semi-Nadeshikoranking in 2021. In February 2021, we were awarded the highest-level Grand Prize in the industrial category of theTokyo Metropolitan Government Women's Participation Awards in recognition of our rapid, top management-led creationof friendly work environments for both men and women. In addition, against the backdrop of these strengthened
initiatives, we achieved the target of "6% female managers by 2025" ahead of schedule in January 2021. With the aim offurther progress, we have set new targets of 10% by 2025 and 20% by 2030, and we will continue to strengthen ourefforts.

The Challenge of Value Creation

Our Company has introduced Cokeone+, an integrated
enterprise resource planning (ERP) system that brings
together back office support, inventory management,
customer service, and more. We completed integrationand consolidation of multiple ERP systems inherited fromlegacy bottler companies into Cokeone+, and achieved
integration of front office and back office work areas
along with integration of work processes spanning thetwo areas. Through centralized management andvisualization of information and the reduction of manual
work and duplicate input tasks, the system is contributing
to the strengthening of management analysis capabilities,
improvement of work quality and processes, andimprovement of productivity and efficiency.

Initiatives to Enhance Human Resource Capabilities
and Organizational Strength*Developed by Coca-Cola (Japan) Co., Ltd.

＜Initiatives in the over-the-counter channel＞<Initiatives in the vending channel>

DataOut-of-stock

Electronic
payment
Stampdrink tickets
Campaigns aimed
at consumers

Coke ON

Customers

Number ofCoke ON-compatible
vending machines:
Over 300,000

Undelivered

Big data
Customer's
sales space

Big data platform
Imaging

Analysis

Proposal to customer

Tablets forbusiness
discussions:

About 2,000● Manufacturing● Operations

We are introducing manufacturing IoT systems forthe visualization of equipment operating status,
automated data collection through remotemonitoring, real-time alerts, and other monitoring
purposes. This model is being deployed at theHiroshima Plant, which began operation in June
2020. We plan to eventually extend the know-how
gained at the Hiroshima Plant to all of our plants.

We are undertaking centralized management of
in-house inquiry information, utilization of AI for
response automation, and electronic contract
management to achieve paperless work andvisualization of information, leading to a reductionof work volume, labor savings, and improvements
to the quality of work.

New Diversity Management Selection 100

Endorsement of "Business for Marriage Equality (BME)", a campaign to makecompanies that support marriage equality visible.

Toward the development of global human resources
We are working to develop global human resources for value creation.
In 2020, we established Coca-Cola University Japan (CCUJ) to train next-generation leaders who candrive transformation and lead the Coca-Cola system in Japan into the future. Under the theme of leadership fortransformation, CCUJ develops leadership programs in collaboration with The Coca-Cola Company, as well as
position-specific programs. Each program employs an experiential learning cycle as a learning process todevelop global human resources who can apply their experience and knowledge not only to their own company
but also to global Coca-Cola bottlers.
We are also working to promote global human resources by leveraging access to the global Coca-Colasystem network.

Strengthening of security
As the areas and frequency of IT device usage expand under the advance of digitalization, we are implementing
security measures to protect devices from potential risks. In addition to protection of networks through firewalls, wehave added EDR*1 that protects individual IT devices, and are using the access histories obtained from these to
make logs visual through SIEM*2.
*1 Endpoint Detection and Response, a technology that continuously monitors and responds to threats at the endpoints of a computer system.
*2 Security Information and Event Management, a mechanism that accumulates and manages records (logs) of the operating status of devices and software, quickly
detects and analyzes events that pose security threats, automatically detects anomalies including information leaks, and quickly notifies administrators.
Online meeting with global bottlers

25

Recruitment of human resources from domestic andinternational (Photo of online training)

26

Initiatives for Creating Shared Value (CSV)CSV Initiatives
Our CSV Policy

CSV Goals

Placing Creating Shared Value (CSV) at the core of our management, and taking the respective importance ofsociety and our business into account, our Group has identified three key themes that we will address over the
coming 10 years: respect for diversity, local communities, and resources. Moreover, as a member of the
Coca-Cola system, we take responsibility for acting to co-create the future while we deliver refreshment andeffect change through our business, in order to address the important challenges facing Japan in every aspectincluding the environment, everyday life, and the communities that surround us.
As an important element of our medium-term management plan, we have formulated and are working toachieve our "CSV Goals" which indicates our Group's commitment in the area of ESG (Environment, Social,and Governance) with the aim of creating shared value.

Coca-Cola System Sustainability Framework"CSV Goals" is a statement of the CCBJH Group's commitment in the areas of the environment, society,and governance, grounded in our identification of the issues we must address to achieve a sustainable
future through changes in society. We will engage in CSV activities under the PDCA cycle to achieve"CSV Goals".

Products

Water

Climate change

Front-of-pack calorie label and straightforward nutritional information● 100%

Observation of The Coca-Cola Company Responsible Marketing Policy● 200%

Water source replenishment. Focus on watersheds near our plants● 30%

Water usage reduction by 2030

● 25%

Reduction in greenhouse gas emissions by 2030

Content of recycled PET in PET bottles by 2022

● 90%

Content of recycled PET in PET bottles by 2030

● 100%

Sustainable PET without fossil fuel use by 2030

● Leverage the power and reach of our system to partner with our Communities● 100%

Adoption of recyclable packaging by 2025

● 35%

Further lightweight PET packaging by 2030 (compared to 2004)

Collection● 100%

Collection percentage compared to sales volume by 2030

The nine priority issues are further subdivided into five priority topics specified for immediate action, andfour focus topics that require dedicated attention and action plans. We have also examined the impact of
the three platforms against the Sustainable Development Goals (SDGs) and are working toward progressagainst these SDGs.

Partners● Extensive partnerships across industry and environmental organizations by 2030

Procurement● 100%

Sustainable sourcing

Human rights● 100%

Adherence to Supplier Guiding Principles across our Group value chain● 10%

Female managers by 2025

● 20%

Female managers by 2030

● 10%

Employee volunteers

Diversity &inclusion
Inclusion
GenderCommunities

Packaging / PET

・Drive impact through twonational platforms ( inclusion,

Age / Generation
Disabilities

Resources● 1 million Participants in community programs

Water

resources)

・Initiatives that are sustainable

Greenhouse gas emissions

and additionally have local
relevance

LGBTQ

Society

Renewable energy(Base year of 2015 and target year of 2025 unless noted otherwise)● Main target progress
Zero/low-calorie options
for core brands
2025 Target

100%

2020 Results

2025 Target

Promotion of diversity & inclusion
Promotion of active participation
by women● Promotion of employment of
persons with disabilities● Promotion of work/life balance● Fostering the Next Generations● Providing equal opportunities for
LGBTQ employees●●

27

Community support vending
machines (support during
disasters, etc.)● Seminars on hydration● Industry-government-academia-private
partnerships to address regional
issues● Virtual/online plant tours●

Water resource protection
activities● Reduction of greenhouse gas
emissions● Promotion of recycling● Adoption of containers with low
environmental impact, etc.
● Collaboration with business
partners, customers and industry
associations●

100%

Water source replenishment2025 Target

100% 200%

Sustainable sourcing

Our initiative examples

Initiatives for Creating Shared Value (CSV)● 50%

Design● Three Platforms and Nine Priority Issues

Focus
topics● 100%

World
Without
Waste● Lead with a powerful example of Inclusion in our own business● Take a lead role ̶ working with industry peers ̶ on Resource usage

Priority
topicsFOSHU/functional product growth

important challenges facing Japan, including the environment, peopleʼs lives, and our communities.

Leverage Our Leadership Position to Drive Attention and Action

Strategy● 300%● Promotion of renewable energy

We are committed to creating a shared future and a sustainable business that can make a difference when addressing

PurposeZero/low-calorie options for core brands

The Challenge of Value Creation● Coca-Cola System Sustainability Activities̶Purpose and Strategy● 100%

2020 Results

2020 Results

364%

Adherence toSupplier Guiding Principles
2025 Target

100% 100%

2020 Results

100%

Content of recycled
PET in PET bottles
2030 Target

90%

2020 Results

28%

Female managers
2030 Target

20%

2020 Results

6.2%(As of the end of January 2021)

See the CSV Report for details

https://en.ccbji.co.jp/csv/doc.php

28

TOPICSCSV Initiatives Leveraging Our Strengths

Packaging initiatives

Vending machines rooted in local communities

PET bottles are lightweight, easy to carry, and can be opened and closed any number of times, making themconvenient to modern lifestyles. In addition, the recycling rate is high and the technology for recycling is
improving, so we believe that if we can collect them in a clean form, they will surely be reborn in a useful form.
As a member of the Coca-Cola system, we are working to bring about our 2030 Packaging Vision. Thisoutlines a concrete plan to switch all PET bottles to 100% sustainable materials by 2030, in support of theWorld Without Waste vision of the global Coca-Cola system.

Joint project for the practical implementation of chemical recycling *In July 2020, we launched a joint project with Taiwan-based Far East New Century Corporation, one of
the world's largest manufacturers of PET resin and polyester fibers, to commercialize bottles made from
PET material obtained through chemical recycling. In November 2020, we launched products using
these PET bottles, and we will continue to make further efforts in the future.
*Collected used PET bottles are sorted, crushed, and washed to remove foreign materials and are broken down into a
raw material or an intermediate raw material of PET resin by depolymerization, after which the raw material is refinedand polymerized into new PET resin.

Creating lighter bottles● Reducing PET resin usage● Introduction of labelless products

We continuously undertake technological innovations in bottles
and packaging in order to make effective use of resources,
reduce the environmental impacts of transportation, and improve
convenience for consumers. Among our efforts to reduce theamount of PET resin necessary to manufacture products, in 2009
we introduced 12g PET bottles, the lightest in Japan at the time*,
for I LOHAS Natural Mineral Water.

We are working to cut environmental
impacts by reducing the thickness of
product labels on PET bottles. In 2020,
we began rolling out a number of labelless
products to further lessen environmental
impacts and improve convenience for
consumers.

*As of March 2009. 500ml PET bottles for domestically manufactured products.
Research by Coca-Cola (Japan) Company

29

Reduction of costs and environmental impacts
through transformation of our business model

We are working to grow sales and provide new value
by strengthening ties with consumers through our
Coke ON smartphone app. Since the launch of theCoke ON service, we have enhanced functions andservices including the Coke ON Pay cashless
payment system, the Coke ON Pass subscription
service, and Coke ON Walk, which lets consumers
earn drinks just by walking.

We are working to reduce our cost through afundamental rethinking of our vending machine
operations. We reduced the number of overall
routes by 20% in 2020, by optimizing the work ofoperations staff and by increasing productivity perroute. By operating delivery vehicles efficiently and by
reducing their number, we were able to contribute to
the reduction of CO2 emissions.

Support during disasters

Contribution to local communities

In the event of a disaster, we provide our
products to people affected by disasters bypartnering with local governments to offer"disaster support vending machines". Equippedwith an electronic bulletin board function, these
vending machines can transmit evacuation sites
and related information in real time, and areplaying an active role as an important informationtransmission tool.

Through our vending machines, we
engage in activities that support local
communities. A portion of the proceedsfrom the purchase of our products is used
Number of
to fund community social contribution
vending machines
projects and sports organizations,through which we provide support for
About
local communities together with ourconsumers and customers.

Conserving energy

Adapting to the COVID-19 pandemic

We have adopted an ultra-energy-saving "peakshift vending machine" that shifts the amount of
power used for cooling from daytime, when the
power usage peaks, to night, when a relatively
large amount of power is available. The
machines feature improved heat insulating
properties and airtightness compared toconventional vending machines, reducing
power consumption throughout the year.

We are responding to the growing
need for vending machines that can
reduce human contact, and we areusing anti-viral and anti-bacterial films
to cover the product selection buttons
and other contact areas of vending
machines. We are also making efforts
to enhance non-contact services
through Coke ON and other means.

700

TOPICS

We promote the bottle-to-bottle initiative that turns used PET bottles into new ones. In March 2020, we adopted
bottles made with 100% recycled PET resin for I LOHAS Natural Mineral Water. These reduce per-bottle CO2
emissions by 49% compared with 100% petroleum-derived PET bottles, successfully reducing the impact on theenvironment. In May 2021, we announced expanded roll-out of our 100% recycled content for packaging toCoca-Cola and Georgia Japan Craftsman in small PET packaging. Going forward, we plan to further raise ourbottle-to-bottle ratio to 90% in 2030 from 28% in 2020.

Enhancing the appeal ofvending machines through innovation

The Challenge of Value Creation

Promotion of "bottle-to-bottle" recycling

For our Company, vending machines are an important asset and sales channel. They play important roles inlocal communities as well. We are increasing sales and reducing costs through means including increasing
installations of vending machines, enhancing the machines' product lineups, carrying out varied promotions,and improving operations, while also working to improve convenience for consumers and solve the problems ofcustomers (e.g., installation locations) and local communities. Going forward, we will continue to contribute to
the development of local communities and the support of safe and secure lifestyles for local residents byleveraging our business scale and integrated business model.

K

Contribution to consumers' health: Foods for Speciﬁed
Health Use (FOSHU) and Foods with Function Claims
As a company that is a close part of consumers' daily lives,
we place the health of consumers first and strive to offer
products and services with value that meet the needs andpreferences of a wide range of generations. In particular,
we are introducing high-value-added products to respondto the growing health consciousness among consumers
and to create new markets. As a part of this, we aredeveloping Foods for Specified Health Use (FOSHU) andFoods with Function Claims.

Foods forSpecified Health Use (FOSHU)
and Foods with Function Claims
Sales volume in 2020

Over

9 million
cases

30

Corporate Governance

Basic Stance on Corporate GovernanceOur basic stance on corporate governance is to seek improvement of management soundness, transparency
and efficiency and increase medium- to long-term corporate value and shareholder value.

We have established the Audit and Supervisory Committee to further strengthen our governance system. The
Audit and Supervisory Committee, which takes a lead role in audits, is composed entirely of outside directors(Audit and Supervisory Committee members), including multiple independent outside directors. The Audit andSupervisory Committee members have voting rights at the Board of Directors meetings and the right to express
opinions on directors' nominations and compensation at the General Meeting of Shareholders. As a result, ourmanagement oversight functions have been further strengthened.

Board of Directors

The Company's Board of Directors consists of 9 directors, including multiple independent outside
directors, and holds regular meetings once every three months in principle and extraordinary meetings asneeded. The Board of Directors resolves matters concerning basic management policies and otherimportant business issues, as well as matters prescribed by law and by the Articles of Incorporation, andreceives reports on execution of business from directors. The Company also delegates a part ofdecision-making on important matters of business execution to directors to further enhance deliberations
on matters of special importance in the Board of Directors and to speed up decisions by the management
team on other matters.
［Overview of Board of Directors］

In addition, we have adopted the executive officer system to separate decision-making and management
oversight functions from business execution functions. Certain important business execution decisions are
entrusted to directors, so that the Board of Directors can deliberate on matters of particular importance. For
other matters, we place emphasis on speed of management decisions by the Executive Leadership Team.

Internal

OutsideIndependent directors［Chart of Corporate Governance Structure］

Independent directors

Election/Dismissal

Board of Directors

ReportingDirectors (excluding directors serving on the Audit & Supervisory Committee)

Directors serving on the Audit & Supervisory Committee
Supervision/Reporting

Reporting executionof operation

ReportingInternal Audit Office

Auditing

Executive Officers
Group Companies

Divisions

Reporting
Auditing/Determining proposals for election or dismissals
Coordination［Major meeting structures attended by the management team］

When making decisions on important matters of the Company, the president and the vice president withrepresentative rights, or either of these and heads of functions including executive officers, engage indeliberation within major meeting structures and connect this to prompt decision making.

［Examples of major meeting structures］
ELT*1 Meeting

S&OP*2 Meeting

IT Committee

Capital Committee

This meeting discusses
major issues and strategic
directions that span theentire company or multiple
units.

This meeting identifies gaps
between sales plans and supply
plans, makes decisions oncompany-wide actions, and works
to optimize the entire supply chain
in conjunction with sales activities.

This committee evaluates
the consistency of strategy
concerning IT-related
investments, anddeliberates IT policies.

This committee conducts deliberation and progress
management concerning capital investment plans,deliberation and approval of capital investment
projects, and post-execution verification, etc. of
capital investments, for the purpose of appropriate
capital investment management.

BSO*3 Committee

Ethics and Compliance Committee

This committee has established venues
for regularly reporting to management
about the latest activities and thestrategic directions of Coca-Cola
Bottlers Japan Business Services Inc.
*1 Executive Leadership Team

31

This committee engages in activities including awareness andeducation activities related to ethics and compliance,
operation of consultation desks, handling of othercompliance-related cases, and examination and implementationof measures to prevent recurrence of problems.

*2 Sales & Operation Planning*3 Business Service Organization

Term ofoffice(Year)

OutsideDirector

Audit & Supervisory
Committee members

Independent
directors

Calin Dragan

March 2019

1

ー

ー

Bjorn Ivar Ulgenes

March 2019

1

ー

ー

Hiroshi Yoshioka

April 2017

1〇

Hiroko Wada

March 20191

Hirokazu Yamura

March 2020

1

Risk Management Committee

Irial Finan

Attendance in 2020
Board of Directors
meetings

Audit & Supervisory
Committee meetings

ー

10/10

ー

ー

10/10

ー

ー

〇

10/10

ー

〇

ー

〇

10/10

ー

〇

ー

〇

8/8

ー

April 2017

2

〇

〇

ー

10/10

6/6

Celso Guiotoko

March 2019

2

〇

〇

〇

10/10

6/6

Nami Hamada

March 2019

2

〇

〇

〇

10/10

6/6

Vamsi Mohan Thati

March 2021

2

〇

〇

ー

ー

ー

Corporate Governance

Auditing

Auditing

Coordination

Audit & Supervisory Committee

Exchange opinions

Representative Directors(consisting of directors serving on the Audit &Supervisory Committee, including a majority of outside directors)

Financial/Accounting Auditors

Selection/Supervision/Delegation of
execution of important operation

Assumptionof officeReporting/Stating Opinions

Governance and Financial Framework

Election/Dismissal

Female directors

Female directors

General Meeting of Shareholders
Election/Dismissal

7／9
5／9
2／9

Outside directors

Evaluation of the Effectiveness of the Board of Directors
Based on self-evaluation by directors regarding the operation, support system, composition, etc. of the Boardof Directors, the Board of Directors conducts an effectiveness evaluation while obtaining advice from anexternal third-party organization. In the 2020 evaluation of effectiveness, the following issues were identified.
From the self-evaluation by the Directors, we have received generally positive evaluations on the issues
identified last year, such as business updates by major divisions and efforts to explain the contents ofdeliberations in advance, and we recognize that the effectiveness of the Board of Directors as a whole isimproving.
It has been confirmed that the Company will continue to promote ongoing efforts to further revitalize
discussions at the Board of Directors meetings, focusing on the following three points.
Enhancement and evolution of deliberations on themes in response to changes in the business environmentthat may affect the Group's business.
● Provision of materials for Board of Directors meetings at appropriate times to enable prior consideration.
● Provision of materials for Board of Directors meetings in an appropriate form that is easily understood,organized and analyzed.
●

Based on the results of this evaluation of the effectiveness of the Board of Directors, we will actively andcontinuously work toward improvements in management to further enhance and deepen the Board of Directors'
discussions according to changes in the business environment, and toward further sustainable growth andimprovement of medium- to long-term corporate value.

The Committee reviews the critical risks
inherent in the CCBJH group as identified
through the ERM PDCA cycle and evaluates
the effectiveness of the controls and risk
mitigation measures for these risks.

See the Corporate Governance for details.

https://en.ccbj-holdings.com/corporate/governance/

32

Corporate GovernanceAppointment of Outside Directors

Three of the Company's five directors (excluding directors who are Audit & Supervisory Committee Members),
and the four directors who are Audit & Supervisory Committee Members, are outside directors.
As outside directors, the Company nominates persons who are considered to contribute significantly toincreasing the corporate value of the Company. Moreover, if it has been determined through investigation by
the Company within the scope of reason that none of the following criteria apply to the Company's outside
directors, the Company will deem outside directors to possess sufficient independence from the Company.

［Standards for determination of independence of outside directors］

Policy regarding Cross-shareholdings
In principle, it is the Company's policy to refrain from cross-shareholdings.

However, there are cases in which the Company acquires and holds such shares to create business
opportunities, and maintain and strengthen its relationships with business partners and local communities.
The Company regularly assesses and reports the associated holding costs and investment returns for its majorcross-shareholdings, and work on the reduction of cross-shareholdings based on the result of this assessment.
［Number of cross-shareholding companies and book value of these shares］
Number ofcompanies

Total book value of shares(Millions of yen)

Unlisted stocks

118

4,436

Stocks other than unlisted stocks

84

14,891

If none of the criteria below apply, the Company considers the director to have sufficient independence.
An employee and/or executive of the Company and/or a subsidiary within the past 10 years
A person and/or executive who had a significant business relationship with the Company within the past 1 year*1● An employee and/or executive of the company who had a significant business relationship with the Company within thepast 1 year*1● A consultant, certified public accountant, attorney, etc. who has received significant compensation from the Company
other than executive compensation within the past 1 year *2● An entity or executive thereof who has received a significant donation from the Company within the past 1 year *2● A close relative of any of the above *3●●［Stocks for which number of shares decreased during the fiscal year］［Reasons for appointment of outside directors］
Category/Name
Outside Director

Hiroshi Yoshioka
Outside Director

Outside Director

Hirokazu Yamura

Independent
Director

The Company expects to leverage Hiroshi Yoshioka's extensive managerial experience and global insights, cultivated throughexperience as a Coca-Cola bottler outside director and at Sony Corporation, on behalf of our Group's management. As no
special vested interest exists between the individual and the Company, the Company deems that no risk of conflict of interest
with general shareholders exists and has appointed the individual as an independent director.

○

The Company expects to leverage Hiroko Wada's extensive management experience and global insights, cultivated as
director of The Procter & Gamble Company and representative director of Dyson and of Toys "R" Us-Japan, on behalf of ourGroup's management. As no special vested interest exists between the individual and the Company, the Company deems thatno risk of conflict of interest with general shareholders exists and has appointed the individual as an independent director.

○

The Company expects to leverage Hirokazu Yamura's extensive managerial experience and insights cultivated throughexperience as Representative Director & President of Michinoku Coca-Cola Bottling Co., Ltd. While the Company has thebusiness relationship noted below with the corporate group of said company, the transaction value is small and transaction
prices and other conditions are conducted under appropriate conditions in the same manner as with other business partners.
The Company believes that its free business activities will not be hindered by the corporate group of said company.
Accordingly, as there is no risk of significant impact from said company, the Company deems that no risk of conflict of interest
with general shareholders exists and has appointed the individual as an independent director.

Irial Finan

Outside Director(Audit & Supervisory
Committee member)

Celso Guiotoko

Outside Director(Audit & Supervisory
Committee member)

Nami Hamada○

Outside Director(Audit & Supervisory
Committee member)

Vamsi Mohan Thati

13

Stocks other than unlisted stocks

21

3,196

［Stocks for which number of shares increased during the fiscal year］
Number ofcompanies

Total amount spent to increase
the number of shares held
(Millions yen)

Reason for increase in
number of shares

Unlisted stocks

−

−

−

Stocks other than unlisted stocks

23

45

The Company increased the number of shares ofthese companies by purchasing through suppliersʼ
share ownership association of these companies

https://en.ccbj-holdings.com/ir/library/securities.php

Promotion of Information Disclosure andConstructive Dialog through IR Activities

Irial Finan has extensive experience and global insights as a corporate manager, with many years of involvement in the
Coca-Cola business as an outside director of a Coca-Cola bottler in Japan, as part of management of The Coca-Cola Company
and global bottlers, and as representative of the Bottling Investments Group supervising Coca-Cola bottlers worldwide, andhas auditing experiencing as a Director who is an Audit & Supervisory Committee Member of the Company, and a chairman of
the Audit & Supervisory Committee. As a director who is an Audit & Supervisory Committee Member of the Company, he isexpected to offer advice based on his abundant experience as a global company manager and his knowledge in the field offinance, in areas of important management decisions, response to foreseeable risks, internal control systems, etc.
Accordingly, the Company has appointed him as an outside director who is an Audit & Supervisory Committee Member.

−

Celso Guiotoko has abundant management experience and global insights cultivated at Nissan Motor Co., Ltd., and at
Nishimoto Wismettac Holdings, Inc., and has experience as a corporate auditor at Nissan Motor Co., Ltd. As a director who is
an Audit & Supervisory Committee Member of the Company, he is expected to offer advice based on his abundant experiencein company management and his auditing, and his knowledge in the field of IT, in areas of important management decisions,
response to foreseeable risks, internal control systems, etc. Accordingly, the Company has appointed him as an outside
director who is an Audit & Supervisory Committee Member. As no special vested interest exists between the individual and theCompany, the Company deems that no risk of conflict of interest with general shareholders exists and has appointed theindividual as an independent director.

○

Nami Hamada has extensive experience in finance and accounting, including managing a finance-related consulting
company herself, and has abundant experience and global insights cultivated on the corporate management team of Lehman
Brothers Japan. As a director who is an Audit & Supervisory Committee Member of the Company, she is expected to offer
advice based on her abundant experience as a company manager and her knowledge in the field of finance, in areas ofimportant management decisions, response to foreseeable risks, internal control systems, etc. Accordingly, the Company has
appointed her as an outside director who is an Audit & Supervisory Committee Member. As no special vested interest exists
between the individual and the Company, the Company deems that no risk of conflict of interest with general shareholders
exists and has appointed the individual as an independent director.

○

Vamsi Mohan Thati serves as President of the Greater China and Mongolia Operating Unit at The Coca-Cola Company. He
demonstrates strong leadership in a variety of fields including operations, market execution, and general management at The
Coca-Cola Company Bottling Investments Group, and has extensive experience as a corporate executive in business units in
the Asian region. As a director who is an Audit & Supervisory Committee Member of the Company, he is expected to offer
advice based on his abundant experience as a global company manager, in areas of important management decisions,
response to foreseeable risks, internal control systems, etc. Accordingly, the Company has appointed him as an outside
director who is an Audit & Supervisory Committee Member.

4

See the Securities Report for details.

Relationship with the Company: The Company has a business relationship with Michinoku Coca-Cola Bottling Co., Ltd. that
includes buying and selling of products. (Sales, etc.: 0.3% of the consolidated revenue of the Company; Purchasing, etc.:
0.5% of the consolidated revenue of said company)

Outside Director(Audit & Supervisory
Committee member)

Unlisted stocks

Corporate Governance

Hiroko Wada

Reasons for appointment (Positions etc. are as of the time of appointment)

Total amount by selling anddecreasing the number of shares(Millions yen)

Governance and Financial Framework

Number ofcompanies*1 If the transaction between the Company and the person and/or the company exceeds 2% of the Company's consolidated revenue in the latest fiscal
year, this will be considered significant*2 If the annual amount of compensation or donation to the person/entity exceeds JPY 10 million, this will be considered significant
3* Within the second degree of kinship−With the goal of timely and appropriate information disclosure and constructive dialog with shareholders andinvestors, we engage in a variety of Investor Relations (IR) activities in which we explain our businessstrategies, business activities, financial and non-financial information, and other information through quarterly
earnings presentations and IR meetings.
［Main IR activities in 2020 ］
Activity

2020 results

Details

Earnings Presentation

4 timesQuarterly earnings presentations were held by the President and CFO. The
briefing content is available via Webcast on the Company's website.
(https://en.ccbj-holdings.com/ir/library/presentation.php)

IR meetings with analysts and About 150 times; Held primarily by phone and video conferencing due toinstitutional investors
about 270 persons COVID-19 pandemic. Top management took part as required.
Participation in domestic andoverseas conferences

4 times

Participation in domestic and overseas conferences held online due to
COVID-19 pandemic. Top management took part as required.

Other IR briefings

3 times

Held small meetings and IR briefings online, with participation by
top management.

Delivery of video message
from the President

1 timeIn 2020, we began delivery of video messages from the President forinvestors. The video messages are available from the Investor Relations
page of our website. (https://en.ccbj-holdings.com/ir/)

Relationship with the Company: The Company has concluded contracts concerning the production, sales, trademark usage,etc. of Coca-Cola, etc., with The Coca-Cola Company.

33

34

Corporate Governance

Executive Compensation System
Basic policy［Overview of the executive compensation system］
Targets
Executive
directors,
executive
officers

Basic policy

Decision-making process● The Company will set the level andcomposition of compensation to
enable the hiring and retention oftalented human resources who are
diverse in terms of nationality,
experience, etc.

performance-based compensation toprovide sufficient incentive to achieve
profitable growth.

● The system will promote improvement

Supervisory
officers● Compensation consists of only basic

compensation, based on role inmanagement supervision andauditing.

objectivity in compensation decision
procedures, the content of compensation isdeliberated by the Audit & Supervisory
Committee, composed of only outside directors,
based on policies concerning the determinationof compensation for directors and within the
total amount determined at the General Meetingof Shareholders. Through resolution of theBoard of Directors, the setting of compensation
is delegated to the representative director, whodetermines the compensation for each
executive director, including the amount of
performance-based compensation.

● Compensation for directors who are Audit &Supervisory Committee members is proposedto the Audit & Supervisory Committee and isdetermined through deliberation with directors
who are Audit & Supervisory Committee
members, within the total amount determined at
the General Meeting of Shareholders.

● Compensation is decided inaccordance with scale ofresponsibilities, utilizing data fromcompensation surveys performed byexternal research organizations andtaking into account the level ofcompensation provided at companies
such as domestic and overseas
companies of similar scale in similarindustries, with the intent of providing
a level of compensation that enables
recruitment and retention of talented
people who are highly diverse interms of nationality, experience, etc.

● The Company makes use ofcompensation survey data fromoutside expert organizations, etc.,with reference to compensationlevels in domestic companies ofsimilar scale, and sets levels inaccordance with roles.

● Through resolution of the Board of Directors,

100

Variable compensation

10

Annual bonus

Long-term incentives

30〜85

15〜100*Excluding retirement payment (annual deferral for retirement remuneration)［Image of compensation structure (in case of Representative Director & President)］
Fixed compensation

Under minimum payment
Under standard payment
Under maximum payment

35

RSU

69%

31%

37%
30%

Annual bonus &PSU at base amount

63%
70%

Limit on director compensation (excluding
directors who are Audit & Supervisory
Committee members): 850 million yen/year(approved through resolution of Proposal
No. 5 at the 2019 General Meeting of
Shareholders of the Company). (Numberof directors at the time of the resolution,
excluding directors who are Audit &Supervisory Committee members: 5)

depending on the achievement of performance targets in each fiscal year (company-wide * In case where the Audit & Supervisory
Committee has deliberated and deemed it
performance and individual evaluations).

● Business income, sales volume, and revenue have been adopted as metrics for creatingnecessary, housing allowances and otherfringe benefits may be paid within the limitof 850 million yen.

● Two types of stock-based compensation systems, (1) PSU and (2) RSU, are adopted as

The following are upper limits for thecompensation listed at left that is paid
to directors.

motivation for achieving profitable growth in accordance with the policy for determining
officer compensation, etc.

Long-term
incentives

long-term incentives.

● The standard amount for long-term incentives overall ((1)+(2)) is set at 15% to 100% of

basic compensation, according to the scale of responsibilities. The PSU standard amountis set to 50% and the RSU standard amount is set to 50% of the standard amount.
● With regard to (2) RSU, additional grants for the purpose of retention and other factors
may be made for directors in addition to the above-mentioned basic RSU amount up to
the compensation limit detailed on the right, if deemed necessary by the Audit andSupervisory Committee.
(1) PSU(Performance
Share Units)● Provided as an incentive for achieving medium- to long-term performance targets.

● The number of shares to be issued is determined within the range of 0% to 150% of the

PSU standard amount depending on the achievement of performance targets (onlyconsidering company-wide performance) three years after the share units have been
granted (with half of the shares to be issued paid in cash for the purpose of allocating
funds for the payment of tax obligations).

Compensation framework for directors(excluding directors who are Audit &Supervisory Committee members): Up
to an amount limited to 600,000
shares per year multiplied by themarket price at the time granted(approved through resolution of
Proposal No. 4 at the 2020 General
Meeting of Shareholders of theCompany). (Number of directors at thetime of the resolution, excluding
directors who are Audit & Supervisory
Committee members: 5)

Annual bonus &PSU at maximum● Provided for the purpose of aligning interests with shareholders, creating incentives toincrease corporate value, and strengthening retention of talented people.

● A predetermined number of shares is issued at the time of retirement (with half of the shares tobe issued paid in cash for the purpose of allocating funds for the payment of tax obligations).

*With regard to fringe benefits, the Company pays housing allowances, etc. based on CCBJH Group internal rules concerning overseas postings, deliberated by
the Audit & Supervisory Committee and approved by the Board of Directors, to support the execution of assignments outside of the country.

［Payment of compensation to directors in 2020］■Directors' Compensation
Executive category

Total amount ofcompensation, etc.
(million yen)618

Directors(of which, paid to outside directors)(39)

Directors(Audit & Supervisory Committee members)(of which, paid to outside directors)

(70)

Total
(of which, paid to outside directors)

(109)

70

688

Total amount by type of compensation, etc. (million yen)
Basiccompensation

Long-term
incentives

Bonus

Other

Number of
eligible directors

405

−
（−）

132

(−)

(−)

(3)

70

−
（−）

−
(−)

−
(−)

(5)

475

−
（−）

132

(39)
(70)
(109)

81

81

(−)

(−)

6
5

11

(8)

■Total amount of compensation, etc. to persons for which total amount of compensation, etc. is 100 million yen or more
Name

Variable compensation

Base salary &retirement payments● The target amount is set in the range of 30% to 85% of base salary depending on their

responsibilities.

(2) RSU(Restricted
Stock Units)［Range of standard amounts of compensation: Image when basic compensation* is set to 100］Retirement payments● Provided as an incentive for achieving performance targets for each fiscal year.

subjected to disciplinary measures, the Company may reduce the amount paid or withhold
payment. In addition, a special increase may be made in recognition of particularly meritorious
service. Reduction of amounts, non-payment, and special increases undergo approval by the
Board of Directors based on deliberation by the Audit & Supervisory Committee.

The following are upper limits for thecompensation listed at left that is paid to
directors.

creating motivation for medium- to long-term improvement of corporate value inaccordance with the policy for determining officer compensation, etc.

Compensation for executive directors and executive officers is composed of fixed compensation and variable
compensation that varies with factors such as corporate performance, to reflect responsibilities andcontribution to corporate performance. The standard amount of compensation is set according to the scale ofresponsibilities. The larger the responsibilities, the higher the percentage of variable compensation.

Basic compensation*

Annual bonus

cumulative amount calculated and paid upon retirement.

● In the event that the individual has caused serious harm to the CCBJH Group or has been

● Consolidated ROE and growth rate of consolidated net sales are used as metrics forCompensation system for executive directors and executive officers

Fixed compensation● An amount equal to 10% of basic compensation is accumulated every year, with the

Corporate Governancecompensation for outside directors who are not
Audit & Supervisory Committee members isdeliberated by the Audit & Supervisory Committee
based on policies concerning the determination ofcompensation for directors. The setting ofcompensation is delegated to the representative
director and president, who determines
compensation within the total amount determinedat the General Meeting of Shareholders.

● Monthly payment of an amount determined based on responsibilities.

Retirement
payment(annualdeferral for
retirement
remuneration)● The amount of payment varies in the range of 0% to 150% of the target amount

Variable compensation

in medium- to long-term corporate
value and the sharing of profit
consciousness with shareholders.

● In order to increase the transparency andBase salary

Governance and Financial Framework● The composition ratio will emphasize

Level［Compensation structure (From April 2021)］
Fixed compensation

We have designed our executive compensation system on the basis of the following policy. Executives subject
to the system in 2020 are 2 executive directors, 7 supervisory officers (directors who are Audit & Supervisory
Committee members and outside directors who are not Audit and Supervisory Committee members), and 12
executive officers.

Executive
category

Total amount by type of compensation, etc. (million yen)
BonusLong-term
incentives

Other

Total amount ofcompensation, etc.
(million yen)

199

−

101

58

358

132

−

31

24

186

Basic
compensation

Calin Dragan

Representative
Director

Bjorn Ivar Ulgenes

Representative
Director

Note 1: Compensation for directors includes remuneration paid to one director (excluding directors who are Audit & Supervisory Committee Members) who retired
at the conclusion of the 2019 General Meeting of Shareholders held on March 26, 2020, and one director (one of which is an outside director) who is an
Audit & Supervisory Committee Member.
Note 2: Basic compensation includes retirement payments, 2018 special incentives, amount for fringe benefits (housing allowance, etc.), etc.
Note 3: Long-term incentives include PSU, RSU, and special RSU.
Note 4: "Other" refers to leadership awards. As a leadership award to reward achievements in promoting business transformation in an uncertain market
environment and to ensure retention, in 2020 the Company made the decision to pay a total of 138 million yen in cash, commensurate with the scale ofcontribution, in March 2021. The Audit & Supervisory Committee has deliberated the decision on payment and has deemed it appropriate.

36Corporate GovernanceRisk Management System
Effective management of risk

ERM program

The CCBJH Group has implemented an Enterprise Risk Management (ERM) program, which is being
embedded into the corporate culture. ERM is a business enabler that drives business growth by identifying andleveraging business opportunities as well as identifying and managing foreseeable risks.
Our system of ERM and internal control actively monitors operational, strategic, financial, legal and regulatory
risks with the ERM program specifically designed to manage risks and opportunities at all levels within thebusiness. The focus is on leveraging opportunities to support our growth, and for identified risks, to implement
counter measures to ensure that we achieve our organizational goals and business plans. Cultural integrationof the ERM concepts is key, and through training and awareness across the business we are actively fostering
our overall culture of risk management.

In 2020, against the backdrop of COVID-19 our ERM program was given greater emphasis. The Group
increased the involvement of management across the business by conducting risk interviews with the membersof the leadership team, appointing senior leaders to be responsible for risks, and conducting risk identification
surveys with all the corporate functions. Functions are addressing identified major risks under the direction of
the executive leadership who are responsible for monitoring the progress of the actions and initiatives taken.
The effectiveness of the initiatives is monitored regularly to ensure that they are fit for purpose. The risks andmitigations are reported quarterly to the Audit & Supervisory Committee and the Board. The program is subject
to independent review by Internal Audit against global best practices ensuring that the program actively grows.
During 2020, in response to the potential impacts on our business of COVID-19 we implemented our crisis
response routines setting clear priorities on the protection of our people, safeguarding our product supply,
responding to changes in customer and consumer demand and supporting our local communities.

O ur E RM cyc l e a n d sys te m
Board of Directors
Monitor andmeasure theeffectiveness

Identify the risks,
opportunities andresponse actions
1

5

Execute theresponse actions

4

Assess the risks
and determine
the major risks
and opportunities

Decide who will be
responsible andwhat action to takeMonitorRisk Management Committee(Chair: Representative Director & President)
Report2
3

ReportMonitor

Major risk owners(Executive Officers)
ReportMonitor

Functions in charge of taking actions
to respond to major risks(Heads of divisions / consolidated subsidiaries)

Crisis Management Committee

Disaster Countermeasures Task Force

Response to serious incidents or accidents

Response to large-area, large-scale disasters

Through the Coca-Cola system's proprietary IncidentManagement & Crisis Resolution (IMCR) process, theCompany cooperates with relevant business departments
within the Company, Coca-Cola (Japan) Co., Ltd., and otherbottler companies to carry out information collection anddeliberation on initial response and solutions. The Company
further executes measures for the restoration of normal
business operations, and investigates measures to prevent
future occurrences.

The Company has constructed a business continuity plan
(BCP) for large-area, large-scale disasters. The Company
checks and improves the plan through regular training,and continuously strives to improve its effectiveness.

Initialresponse

Temporary
restorationof businessBusiness
restoration

Major risks
The major risks that may have a material impact on the CCBJH Groupʼs financial condition, businessperformance and cash flow are summarized below. For details of the key risk themes and the material risks that weare actively managing, please refer to our securities report, which includes specific details such as risk description,
potential impact and our key mitigation strategies. The list does not include all risks that can ultimately affect ourbusiness as there are risks that are not yet known and risks currently evaluated to be immaterial that could ultimately
have an impact on our business or financial performance. We are establishing early warning indicators to provide
insights into emerging risk which will enable us to implement countermeasures accordingly.

・Responsible for the Integrated management of majorrisks and growth opportunities

H I G H R I S KS

・Visualize and supervise the overall ERM activities

Natural Disasters

Changing Consumer Mindset

Sustainability(Plastics)

・Monitor the performance of organizations in charge oftaking actions to respond to risks under their ownership・Measure and confirm the effectiveness of the risk
response actions

Evolving Commercial andCompetitive Landscape

People Talent(Attraction and Retention)

Financial Conditions

・Responsible for taking actions to address the risks thatthe organization is in charge ofCyber Security and System
Availability

Climate Change

Strategic Stakeholder Relationships(The Coca-Cola Company)

・Final responsibility for managing the risks under theirownership・Formulate and execute the actions to address the risks
that the organization is in charge ofCorporate GovernanceIn 2021, the Company appointed a Head of Risk Management (Chief Risk Officer), who as a member of theleadership team reporting to the President, is tasked with leading the risk and resilience transformation andstrengthening the integration of the overall program.

Integrated into the program is our Crisis Management Committee that leads the decision-making and response
to a serious event or accident that requires crisis management focus. A Disaster Countermeasures Task Force
performs deliberation and decision-making on business continuity plan (BCP) activation in the event of alarge-area, large-scale disaster that has a significant impact on our business activities.
Governance and Financial Framework

Risk management in a challenging environment

Our risk management system incorporates a variety of processes including regular risk discussions by the
Executive Leadership Team; process integration into our annual and strategic business planning cycles;
continual monitoring of our internal and external environment for issues that may alter our risk profile and create
opportunities; and education and training to increase ERM awareness across our business functions.
The risks management policies, procedures, risk prevention activities are overseen by our Risk Management
Committee which also aligns annually on our strategic reportable risks.

M E D I U M R I S KS
E RM d e f e n s e lin e sFirst Defense Line

Second Defense Line

Third Defense LineBusiness functions

Function heads and ERM department

Internal Audit Department

Function heads and the ERM
Department within the Risk Management
Group manages the program andoversees the risk and crisis responsecompany wide.

The Internal Audit Office, which
independently reports to the Board of
Directors, provides rational assurance forcompany-wide risk management.

Group companies and businessdepartments autonomously control risks
as owners of the risks.

37

Business Transformation

Quality and food safety

Regulatory Compliance and Ethics

Macroeconomic(Pandemic)

Manufacturing, Logistics &Infrastructure

Commodity Pricing

Note : Priority Level, Defined according to the level of impact and likelihood of occurrence

See the Securities Report for details.

https://en.ccbj-holdings.com/ir/library/securities.php

38

Financial Data, Company Profile, etc.

Commentary and Analysis of Operating Results in 2020
Analysis of Financial Position

Analysis of Operating Results
In the fiscal year from January 1, 2020 to December 31, 2020, the non-alcoholic ready-to-drink (NARTD) market in Japan is seen as
having declined versus the prior year for reasons including the novel coronavirus (COVID-19) pandemic and subsequent decline indemand as consumer traffic fell, as well as unseasonable weather in July.
Under the guiding concept of “business as usual is not an option” in our mid-term strategic business plan announced in August 2019, we
focused on our core beverage business and implemented initiatives to fundamentally transform our business, including transformation in
the important vending channel and back-office routines to drive cost efficiencies, increases in production and supply capacity, andpromotion of new and more flexible working styles. In the short term, we focused on urgent cost mitigation initiatives to deal with the rapidly
evolving situation triggered by the COVID-19 outbreak, as we continue to address our cost structure and the high fixed-cost base of thebeverage business. We are also finding opportunities during this turbulent period to accelerate the pace of ongoing transformation projects
and to identify incremental growth and efficiency improvement opportunities. This will ensure that we are well-prepared for the evolution of
the business environment in the longer term.

Our full-year results were impacted by weak beverage business sales volumes due to the COVID-19 situation while we addressed urgent
mitigation efforts by driving fundamental business transformation and other cost-savings initiatives to partially offset the current-year
revenue decline. In spite of an approximately 100 billion yen decline in consolidated revenue for the year, we were able to deliver slightly
positive Business Income through significant fixed-cost savings, making costs more variable through process improvements, investments
in IT systems, and organizational restructuring.

(Unit : millions of yen)

Revenue

Net Income Attributable to Owners of the Parent

2020

890,009791,956(11.0％)

11,447169(98.5％)（57,952）(4,715)ーNote 1: In the fiscal year ending 31 December 2020, the Healthcare and Skincare business has been classified as a discontinued operation as a result of thedecision to sell all shares in Q'sai held by the Company. As a result, Revenue and Business Income for the previous financial year have been reclassified
to the amounts for continuing operations excluding discontinued operations.
Note 2: Business Income is a metric for measuring the ordinary performance of a business. It is calculated by deducting the cost of sales sold and selling, general,and administrative expenses from net sales, and by adding and subtracting other income or other expenses that generate recurring profit or loss.

■Highlights● Business Income exceeded revised plans, driven by fundamental transformation and incremental cost savings.
● The vending channel value share continued to improve, with 21 consecutive months of positive momentum. In over-the-counter market
share in the fourth quarter (October to December), our value share recovered as targeted sales promotion investments succeeded.
● We continued to drive fundamental business transformation guided by our mid-term strategic plan as we face the challenges of the
COVID-19 pandemic, the decision to postpone the Tokyo 2020 Olympic and Paralympic Games to 2021, and other impacts on
our business activities. We completed transformation of vending and OTC sales routes ahead of plan, reduced fixed costs, andincreased business flexibility, achieving cost savings of over 35 billion yen.
● We completed recovery and expansion of supply capacity, with seven new manufacturing lines, including the new Hiroshima Plant,
beginning operation as planned. We completed construction of the Saitama Mega DC that will help optimize the logistics network in
the Tokyo metropolitan area, and started operations in February 2021.
● Sales of our Lemon-dou alcohol beverage remained robust. In the fourth quarter, we expanded the lineup with new products.
● We divested the Healthcare and Skincare business as of February 1, 2021, creating a cash inflow of about 45 billion yen. We will
use the proceeds for investments to drive transformation and growth and for initiatives to improve shareholder value.
● We did not provide 2021 full-year earnings guidance, given renewed market uncertainty and reductions in consumer traffic after
declaration of a second state of emergency in Japan, and lack of clarity on a timeline for vaccinations and expected market recovery.
Net revenue of continuing operations (Beverage Business) for full-year 2020 declined 98,053 million yen, or 11.0%, to 791,956 million
yen, reflecting declining volume trends since March, driven by the ongoing impact of COVID-19 and unseasonably rainy and cool weather
in the summer, especially in the month of July.

39

Total liabilities at the end of the year were 437,510 million yen, a decrease of 8,443 million yen from the end of the previous year. This was
mainly due to a decline in liabilities involving retirement benefits due to favorable operation of pension assets and a decline in trade andother payables associated with a decline in sales volume, although bonds and loans payable increased due to 50,000 million yen in
short-term borrowings in April 2020 for the purpose of access to cash and securing of sufficient liquidity amid the continuation of anuncertain environment.
Total equity at the end of the year was 502,093 million yen, a decrease of 4,398 million yen from the end of the previous year. This wasprimarily due to a decrease in other comprehensive income and a decrease in retained earnings due to payment of year-end dividends
and decline in net earnings.

Analysis of Cash Flows●

Cash Flows from Sales Operations

Cash flow from sales operations resulted in 43,716 million yen (42,629 million yen in the previous year) due to a net loss before tax of
12,065 million yen from ongoing business, an increase in depreciation and amortization expenses, a decrease in inventories, return ofcorporate income tax, increase in other assets, decline in trade and other receivables, payment of corporate income tax, and other factors.
●

Cash Flows from Investment Activities

Cash flow from investment activities resulted in expenditures of 52,076 million yen (compared with expenditures of 68,308 million
yen in the previous year), due to factors including expenditures for the acquisition of tangible fixed assets associated with theexecution of capital investments for the restoration of our supply structure and the stepwise expansion of our production capacity,
as well as income from the sale of tangible fixed assets and intangible assets through the sale of under-utilized assets andcross-shareholdings, income from the sale of other monetary assets, etc.
●

Cash Flows from Financing Activities

Cash flow from financing activities resulted in income of 20,912 million yen (compared with income of 73,994 million yen in theprevious year), due to factors including expenses for redemption of bonds, payment of year-end dividends, repayment of leaseliabilities, as well as an increase in short-term borrowings for the purpose of allocation to operating capital.
As a result of the above, cash and cash equivalents at the end of the year increased by 12,553 million yen from the previous year to126,378 million yen.

Capital Expenditures
During the consolidated fiscal year, the Group made capital expenditures totaling 65,521 million yen, primarily in its mainstay
segment, the Beverage Business.
The expenditures were mainly for bringing vending machines to market to strengthen sales capabilities, and for equipment toimprove production efficiency and to adapt to new products.

Research and Development
No relevant matters apply.

Policies for Profit Distribution and Dividends

Business Income from continuing operations declined by 11,278 million yen, or 98.5%, to 169 million yen. This reflects a gross profit
decline driven in large part by negative channel mix due to volume declines in the vending and convenience store channels, partially
offset by significant efforts to drive cost reductions across labor, promotional activities, and back-office expenses.

We periodically review our capital structure and dividend payout ratio to maximize shareholder returns while maintaining theflexibility to pursue expansion opportunities. We will utilize retained earnings for sustainable growth investments, and to pursue
business growth and the further enhancement of corporate value.

Consolidated operating loss from continuing operations improved from the prior year to a loss of 11,722 million yen (58,904 million yen
loss in the prior year), mainly by cycling a 61,859 million yen impairment loss on goodwill in the prior-year second quarter. As reference,other income (non-recurring) includes 2,520 million yen of government subsidies that partially offset temporary paid leave expenses in2020 due to the COVID-19 pandemic. Other expenses (non-recurring) in 2020 results included 9,184 million yen of special retirement
allowances and others due to the introduction of a voluntary employee retirement program. Other expenses (non-recurring) in 2020
include 3,923 million yen of temporary paid leave expenses, 4,546 million yen of transformation-related expenses, and special retirement
allowances of 7,969 million yen.

The Company sets the active redistribution of profits as its basic policy regarding dividends, placing the highest priority on thestable payment of dividends. The Company has set a payout ratio target of 30% or more for net profit attributable to owners of theparent, and pays dividends to allocate surpluses two times per year (interim and year-end dividends), comprehensively taking
business performance and retained earnings into account.

Net loss attributable to owners of the parent for the full year, the total for continuing operations and discontinued operations, was 4,715
million yen (57,952 million yen loss in the prior year), led by improvement in operating loss.

Financial Data, Company Profile, etc.

Business Income

YoY

2019

Total equity at the end of the year was 939,603 million yen, a decrease of 12,840 million yen from the end of the previous year. This is
attributable to factors including a decrease in right-of-use assets associated with cancellations of leased site facilities, etc., and adecrease in tangible fixed assets due to the restriction of investments in vending machines. etc. and the sale, etc. of under-utilized assets.

Governance and Financial Framework

The Company has also been evaluating future opportunities for growth and operating synergies in the Healthcare and Skincare business.
We determined that the best way to support the next era of growth for this business is to sell Qʼsai to Q-Partners Co., Ltd., a company for the
purpose of the purchase formed by euglena Co., Ltd., Tokyo Century Corporation, and an investment fund to which Advantage Partners
Inc. provides services. The Company entered into a share transfer agreement with Q-Partners Co., Ltd. as of December 15, 2020 and soldall of the shares of the Companyʼs consolidated subsidiary, Q'sai Co., Ltd., as of February 1, 2021 for a profit of about 12.8 billion yen andcash inflow of about 45 billion yen. As a result of executing the share-transfer agreement, Qʼsai is classified as a discontinued operation for
the fiscal year ending December 31, 2020. Accordingly, the relevant section of prior-year consolidated financial statements and notes havebeen reclassified.

The Group's percentage of equity attributable to owners of the parent at the end of the consolidated fiscal year was 53.4%. We believethat the Company's financial structure remains sound.

As dividends for the year ended December 2020, the Company paid no interim dividend and a year-end dividend of 25 yen per
share, for an annual dividend of 25 yen per share.

40

Financial Data, Company Profile, etc.

Key Financial and Non-Financial Data
JGAAP

2011

2012

2013

2014

2015

2016

IFRS

2017

Operating Results (Fiscal Year):

2017

2018

2019

2020

Operating Results (Fiscal Year):

Revenue（Millions of yen）

399,717386,637

431,711424,406

440,476

460,455

872,623

Revenue（Millions of yen）

837,069

927,307914,783

791,956

Gross Profit（Millions of yen）

195,244

190,795

215,287

212,881

223,951

238,611450,249

Gross Profit（Millions of yen）

412,782

452,151

441,060

362,916Gross Profit Margin

（％）

48.8

49.3

49.9

50.2

50.8

51.8

51.6

Gross Profit Margin

（％）

49.3

48.8

48.2

45.8

Operating Income（Millions of yen）

16,46913,463

15,927

11,00814,262

21,14340,579Business Income（Millions of yen）

40,177

23,276

15,042

169

（％）

4.1

3.5

3.7

2.6

3.2

4.6

4.7

Business Income Margin（Millions of yen）

ー

ー

ー

ー

ー

ー

ー

EBITDANet Income Attributable to Owners of the Parent （Millions of yen）

6,997

6,031

13,625

4,482

9,970

5,245

25,244

Operating Income Margin
EBITDA
Cash Flow Status (Fiscal Year):

（％）

4.8

2.5

1.6

0.0

（Millions of yen）

81,56070,807

71,99359,083Net Income Attributable to Owners of the Parent （Millions of yen）

21,967

10,117(57,952)(4,715)

Cash Flow Status (Fiscal Year):
39,96026,32440,082

28,62840,422

34,38872,450Cash Flow from Operating Activities（Millions of yen）

73,014

51,244

42,62943,716

Cash Flow from Investing Activities （Millions of yen）

(34,050)(14,243)(16,493)(9,590)(24,994)(19,921)(41,090)

Cash Flow from Investing Activities（Millions of yen）

(14,299)(48,628)(68,308)(52,076)（Millions of yen）

5,910

12,08023,58819,037

15,427

14,46731,359

Free Cash Flow

（Millions of yen）

58,715

2,616(25,679)(8,360)Cash Flow from Financing Activities （Millions of yen）

(8,780)(7,149)(8,286)(37,498)

22,416(7,546)(26,159)

Cash Flow from Financing Activities（Millions of yen）

(26,717)(55,835)

73,994

20,912

Cash and Cash Equivalents at End of Fiscal Year（Millions of yen）

34,56439,49560,27541,83079,82886,727

118,741

Cash and Cash Equivalents at End of Fiscal Year（Millions of yen）

118,742

65,510113,825

126,378

Free Cash Flow

Financial Position (End of Fiscal Year):

Financial Position (End of Fiscal Year):

Total Assets（Millions of yen）

342,560

337,348

374,418

337,260

378,105

377,468

883,918

Interest-bearing Debt

（Millions of yen）

ー

ー

ー

ー

ー

ー

（Times）

ー

ー

ー

ー

ー

（Millions of yen）

227,864

231,056

257,936

254,150

260,878

D/E Ratio
Net Assets

Total Assets（Millions of yen）

929,304

877,472

952,444939,603

ーInterest-bearing Debt

（Millions of yen）

81,385

102,814

246,521271,233

ーー

D/E Ratio

261,173

627,485（Times）

0.1

0.2

0.5

0.5

（Millions of yen）

655,038

580,906

506,491

502,093

Basic Earnings per Share (EPS)（yen）

125.5352.68(322.22)(26.29)Equity Attributable to Owners of the Parent per Share (BPS)（yen）

3,204.90

3,163.63

2,821.27

2,797.03

Total Equity
Per-share Information:

Per-share Information:
（yen）

69.99

60.33

128.15

41.07

91.35

48.05

144.26

Net Assets per Share (BPS)（yen）

2,275.55

2,307.44

2,359.82

2,325.19

2,386.81

2,389.28

3,070.01

Annual Dividend per Share

（yen）

41.00

41.00

41.00

41.00

41.00

46.00

44.00

Annual Dividend per Share

（yen）

44.00

50.00

50.00

25.00

Consolidated Dividend Payout Ratio

（％）

58.6

68.0

32.0

99.8

44.9

95.7

30.5

Consolidated Dividend Payout Ratio

（％）

35.1

94.9

̶

̶

Stock Price at End of Year

（yen）

1,335

1,333

2,227

1,661

2,457

3,445

4,115

Stock Price at End of Year

（yen）

4,115

3,285

2,791

1,609

Other Financial Data:

Other Financial Data:
Return on Equity (ROE)

（％）

3.1

2.6

5.6

1.8

3.9

2.0

5.7

Equity Income Margin Attributable to Owners of the Parent (ROE)

（％）

4.6

1.6

(10.7)(0.9)

Return on Assets (ROA)

（％）

4.7

4.1

4.7

3.0

3.8

5.5

6.3

Total Assets / Pre-tax Profit Ratio (ROA)

（％）

5.6

1.6

(6.1)

(1.3)

Equity Ratio

（％）

66.4

68.4

68.8

75.2

68.9

69.1

70.9

Percentage of Equity Attributable to Owners of the Parent

（％）

70.4

66.2

53.1

53.4

Price Earnings Ratio (PER)（Times）

19.1

22.1

17.4

40.4

26.9

71.7

28.5

Price Earnings Ratio (PER)（Times）

32.8

62.4

(8.7)

(61.2)

Price Book Value Ratio (PBR)（Times）

0.6

0.6

0.9

0.7

1.0

1.4

1.3

Price Book Value Ratio (PBR)

1.0

1.0

0.6

Capital Expenditure（Millions of yen）

21,201

20,031

20,242

22,783

16,181

25,72842,539Depreciation and Amortization（Millions of yen）

21,371

20,64323,75822,94324,04817,49137,352

Non-financial Data (End of Fiscal Year):（Times）

1.3

Capital Expenditure（Millions of yen）

42,53953,136

103,882

65,521

Depreciation and Amortization Expenses（Millions of yen）

41,38347,531

56,951

59,583

Outstanding Shares at End of Year

（1000 shares）

206,269

206,269

206,269

206,269（1000 shares）

2,016

22,793

26,917

26,92017,197

17,10016,95916,274

9

9

9

9

4

4

６

7

Non-financial Data (End of Fiscal Year):（1000 shares）

111,126

111,126

111,126

111,126

111,126

111,126

206,269（1000 shares）

11,153

11,155

1,982

1,984

1,987

1,989

2,016

Treasury Stock at End of Year

8,105

7,877

9,650

8,324

8,837

8,616

17,197

Number of Employees at End of Year

Number of Directors

10

10

11

12

11

14

9

Number of Directors

Number of Outside Directors

2

2

2

2

2

4

4

Number of Outside Directors

Treasury Stock at End of Year
Number of Employees at End of Year
Average number of temporary employees
not included in the above

Financial Data, Company Profile, etc.

Net Profit per Share (EPS)

Outstanding Shares at End of Year

Governance and Financial Framework

Cash Flow from Operating Activities （Millions of yen）

2,073

1,890

2,059

1,949

2,613

2,499

Note 1: The data through 2016 represents results for Coca-Cola West Co., Ltd. prior to the business integration. The data for 2017 represents results for
Coca-Cola Bottlers Japan Holdings Inc. from the second quarter.
Note 2: Amounts are rounded down to the nearest unit under Japanese standards and rounded up or down to the nearest unit under IFRS. Percentages arerounded up or down to the nearest unit.
Note 3: In 2020, assets and liabilities of the Healthcare and Skincare business have been classified as the assets held for sale and liabilities directly related toassets held for sales, and the Healthcare and Skincare business has been classified as a discontinued operation, as a result of the decision to sell all
shares in Q'sai held by the Company. Therefore, these are excluded from the above major financial data for 2020.
Note 4: Figures for "Percentage of women in managers positions” and “Women in manager and leader positions” refer to the beverage business.

4,403

4,403

Average number of temporary employees not included in the above

3,957

3,578

4,008

Women in Manager Positions

（％）

ー

3.9

4.2

5.8

Women in Manager and Leader Positions

（％）

ー

6.8

7.3

9.3

（1000 ｍ3）ー

13,99813,316

12,560

（％）

ー

277

322

364

（1000 tons - CO₂）

ー

ー

2,347

2,076

Water Usage
Water Source Replenishment
CO2 Emissions

Note 5: "Water usage" is the total amount of water used in the manufacture of products (excluding water in products) in the beverage business.

41

Note 6: "CO₂ emissions" are the actual emission amount (Scope 1 to 3) of the beverage business. Due to the coefficient change, 2019 actual number has beenrevised retroactively.

42

Financial Data, Company Profile, etc.

Company Profile / Stock Information （As of December 31, 2020）

IR Tools［Company Profile］● Communication Tools

Company nameCoca-Cola Bottlers Japan Holdings Inc.

Securities Code

2579

Headquarters

Tokyo Midtown Tower, 9-7-1 Akasaka,
Minato-ku, Tokyo, Japan

Authorized Shares

500,000 thousand shares

Outstanding Shares*2

206,269 thousand shares (Common share)

Number of Shareholders

62,701 (54,893 with one unit or more)

Number of Shares per
Trading Unit

100 shares

Establishment

December 20, 1960

Paid-in capital

JPY 15,232 million

Number of employees*1 16,274(including 15,772 in the beverage business)（consolidated）

Through the timely and appropriate disclosure of information, we seek to be a company that is correctly
understood and trusted by all of our stakeholders. We report IR information primarily using various IR
tools, and report ESG information (information concerning the environment, society, and governance), thetarget of much attention in recent years, and other non-financial information in our CSV Report. We also
report wide-ranging corporate information on our website.
Annual Review

CSV Reporthttps://en.ccbj-holdings.com/ir/library/annualreview.php

https://en.ccbji.co.jp/csv/doc.php

CSV
REPORT
2021*1 Share of Q'SAI CO., LTD. in the Healthcare and Skincare business was sold on February 1, 2021.
*2 Issued shares of the Company are common shares only. The Company has not issued preferred shares or any other types of shares which entail rights different from thoseof common shares.

［Composition of Shareholders］( 1 unit: 100 shares)［Major Shareholders］
Number of
Shares Held Shareholding（Thousands） Ratio（%）

Shareholder

15.59

The Master Trust Bank of Japan, Ltd.（Trust Account）

10,450

5.83

Custody Bank of Japan, Ltd. (Trust Account)

5,571

3.11

Ichimura Foundation for New Technology

5,295

2.95

Satsuma Shuzo Co., Ltd.

4,699

2.62

STATE STREET BANK AND TRUST COMPANY 505225

4,241

2.36

Senshusha Co., Ltd.

4,088

2.28

Coca-Cola Holdings West Japan, Inc.

4,075

2.27

Mitsubishi Heavy Industries Machinery Systems, Ltd.

3,912

2.18

MCA Holdings Co., Ltd.

3,408

1.90

Individuals
and Others

Foreign
Corporations

https://www.ccbj-holdings.com/ir/library/business.php(Japanese only)● Website for shareholders and investors
Our website provides IR event schedules, financial information,and other extensive IR information for shareholders and investors.
We also provide timely earnings announcements, news releases,
and other notifications to registered users. We conduct earnings
presentations in both Japanese and English, and archive these foraccess at any time.

Other Domestic
Corporations

https://en.ccbj-holdings.com/ir/
Financial Institutions
・
・
・
・
・
・
・
・
・
・
・17.82％/ 58 people, 366,099units
Securities Companies
・
・
・
・
・
・
・
・
・
・
・2.35％/ 42 people, 48,270units
Other Domestic Corporations
・
・
・
・
・
・
・
・
・
・
・32.18％/ 715 people, 661,123units
Foreign Corporations
・
・
・
・
・
・
・
・
・
・
・22.68％/ 576 people, 465,937units
Individuals and Others
・
・
・
・
・
・
・
・
・
・
・24.98％/ 53,502 people, 513,262units

Note 1： 26,920 thousand shares of treasury stock are not shown in the table above and are excluded
from the calculation of shareholding ratios.
Note 2： The Coca-Cola Company holds 18. 80% through Coca-Cola（Japan）Co., Ltd., Coca-Cola
Holdings West Japan, Inc., and other subsidiaries.

［Bond Information］
CCW 3rd Series ofUnsecured Straight Bond
CCBJH 1st Series ofUnsecured Straight Bond
CCBJH 2nd Series ofUnsecured Straight Bond
CCBJH 3rd Series ofUnsecured Straight Bond

Financial
Institutions［Rating Information］
Total amount issued(Million yen)

Coupon rate(%)

Maturity date

30,0000.524

June 17,2022

40,0000.100

September 19,2024

60,0000.200

September 18,2026

50,0000.270

September 19,2029

2018

2019

2020

Japan Credit Rating
Agency, Ltd. (JCR)
long-term issuer rating

AA−

AA−

AA−

Rating and Investment
Information, Inc. (R&I)
issuer rating

A＋

A＋

A＋

Facebook

Financial Data, Company Profile, etc.

27,956

Coca-Cola Bottlers Japan Holdings Inc.

Securities
Companies

Governance and Financial Framework

Coca-Cola（Japan）Co., Ltd.

To Our Shareholders(Annual newsletter toindividual shareholders,Japanese version only)

LinkedIn(Japanese only)

Evaluations from Outside the Company*CCW：Coca-Cola West Co., Ltd. *CCBJH：Coca-Cola Bottlers Japan Holdings Inc.

Gold

AWARD

26 - 28 October 2020

SSON IMPACT AWARDS 2020
honours the highest level of achievement and contribution
in the field of Shared Services［Stock Price and Stock Trading Volume］

In recognition of exemplary performance,
the Judging Committee has awarded

Stock Price
(Yen)

Stock
Trading
Volume(Thousands)

28,00026,00024,00022,00020,000IN PA RTN ERSHIP WITH

JAMIE TAN

D I V I S I ON AL D I R E C TOR , SS ON

L-boshi

KuruminHealth & Productivity
Management
Organization 2021（White 500 ）SSON Impact Awards Asia

Nikkei Index (Close)

18,00016,000□ ■ CCBJH Stock Price■
CCBJH Stock
Trading Volume

4,500
4,000
3,500

30,0003,000

25,0002,500

20,0002,000

15,000

1,500
1,000

10,000

500

5,000

0

1

2

3

4

5

6

7

2018

43

8

9

10

11

12

1

2

3

4

5

6

7

2019

8

9

10

11

12

1

2

3

4

5

6

7

2020

8

9

10

11

12

(month)MSCI Japan Empowering
Women Index (WIN)The Womenʼs Participation
Promotion Awards

0

Also received the Director's Award for Excellence in Disability Hiring from the Bureau of Industrial and Labor Affairs

44